Securities Times reporter Wei Shuguang

  In recent days, regulatory actions focusing on resource protection and promoting the security of the supply chain and industrial chain have continued to advance.

With the introduction of the country's improvement of the coal market price formation mechanism and the convening of the rare earth resource guarantee seminar, all sectors of the market are full of expectations for the further improvement of the pricing mechanism for ensuring supply and stable prices of bulk commodities.

  At present, the prices of coal and iron ore have been "conquered" in the short term, and have dropped significantly from the highs of the year. At the same time, the problems of asynchronous domestic and foreign prices and imperfect pricing mechanisms have surfaced again.

The data shows that in the context of the obvious cooling of the domestic market, the overseas Platts index and the iron ore swaps of the Singapore Exchange are still "high", and the "temperature difference" between inside and outside is large.

  Faced with the current situation in which overseas indices still dominate pricing, some insiders have called for the incorporation of overseas information and quotation agencies into domestic supervision to improve the coverage and accuracy of supervision. , grasp the status and advantages of my country as the largest buyer of iron ore, regulate and guide domestic enterprises to reasonably participate in Platts quotations, reasonably carry out overseas futures and spot transactions, and actively guide and encourage enterprises to use domestic futures prices to set prices.

  The bulk raw material market has cooled significantly

  In the past few days, the National Development and Reform Commission and other departments have continued to conduct research and guidance on the market of raw materials such as iron ore and coal, exposed a number of issues such as the release of market prices, and conducted thorough investigations on the upstream and downstream enterprises of raw materials.

Subsequently, the National Development and Reform Commission held a press conference on the "Notice on Further Improving the Coal Market Price Formation Mechanism" to clarify the coal price range.

  At the same time, the Ministry of Industry and Information Technology and other ministries and commissions demanded that all efforts should be made to do a good job in the stability of the industrial chain and supply chain and the coordination of factor guarantees, so as to get through the supply jams.

On February 23, at the symposium of key industry associations of the Ministry of Industry and Information Technology, the Ministry of Industry and Information Technology required all associations to strengthen situation research and risk early warning, identify emerging and trending problems in a timely manner, and prepare response plans in advance.

On February 24, China Rare Earth Group Co., Ltd. held a special meeting on the protection of rare earth resources, focusing on ensuring the security of the supply chain and industrial chain, and promoting the orderly development of the group's resources and green production.

  Under a series of regulatory "combination punches", the cooling effect is obvious, and the prices of coal and iron ore have fallen sharply.

In the coal market, according to Wind data, the market price of thermal coal (Q5500, produced in Shanxi) in Qinhuangdao on February 25 was 900 yuan/ton, down 16% from the highest price of the year.

In the iron ore market, according to my steel network data, on February 25, the domestic port price (Qingdao Port PB powder) was 860 yuan / ton, down 12% from the highest price of the year.

Driven by the cooling of the spot market and the decline in spot prices, on the 25th, the settlement price of the main domestic iron ore futures contract was 680.5 yuan / ton, down 18% from the highest price of the year.

  However, in the context of a clear cooling of the market, the trend of domestic and foreign futures and spot prices is not synchronized, and the Platts index and SGX iron ore swaps are still "high".

On February 25, the overseas Platts index and swaps were US$133.45/ton and US$137/ton respectively, an increase of 11.6% and 14% compared with the beginning of the year, much higher than the 1% drop in domestic futures.

In the recent decline stage, the overseas Platts index and swaps fell more slowly than domestic futures. On the 25th, the prices fell by 13% and 9% respectively from the highest point of the year, which was less than the 18% decline of domestic futures.

  At present, the Platts index, which is widely used overseas, is the benchmark for purchasing and pricing of bulk raw materials such as iron ore and coal in the international market.

Unlike futures prices, the Platts index is not a price traded by investors, but an "assessed value" calculated from data collected through telephone inquiries and other methods.

In the overseas derivatives market, the iron ore swaps and futures listed on the Singapore Exchange are based on the Platts index, and both domestic and overseas industrial customers have a certain degree of participation.

  "Because the sample collection, transaction sampling and index compilation of the Platts index are not transparent, and the daily trading volume of swaps is limited, it cannot faithfully reflect the purchasing intentions and purchasing needs of domestic companies. Referring to the Platts index for price risk management, companies are magnifying their own While trading risks, it has helped Platts prices rise to a certain extent." said Lang Yu, director of futures and spot business at Galaxy Futures Beijing Branch.

  Promoting China's Index Pricing Influence

  This kind of "Platts is firm and cannot be swapped", the price trends in domestic and foreign markets are not synchronized, and there is a significant "temperature difference" in the regulatory response to the world's largest demand market, which also puts domestic related companies under greater pressure.

  Previously, on February 14, the settlement price of the main domestic iron ore futures contract fell sharply from 883.5 yuan / ton on the previous trading day to 776.5 yuan / ton, a drop of about 7%, which timely reflected the national measures to ensure supply and stabilize prices. market expectation.

However, that day, the Platts index was quoted at US$149.40/ton, a decrease of only 0.5% from the previous trading day. The price difference between its converted futures standard product and iron ore futures expanded from 274 yuan/ton to 370 yuan/ton.

  Later, on February 21, due to the increase in the spot price of steel billets, the orderly resumption of production in steel mills, and the release of a number of good real estate news in Guangzhou and other places, domestic futures spot prices resumed rising, and the settlement price of the main futures contract increased by 1.5%, while the new The settlement price of the main exchange swap contracts rose by 5%, higher than the domestic increase.

  Relevant statistics show that domestic futures have always been discounted to Platts and overseas derivatives, and the discount has recently expanded to 300 yuan / ton.

Affected by the pricing mechanism dominated by the Platts index, the phenomenon of "Platts is strong and the swaps cannot be dropped" is not conducive to the domestic steel industry to ensure stable supply and stable prices, highlighting the imperfection of the iron ore pricing mechanism.

  In fact, in response to the issue of price information release, in May last year, the relevant departments issued the first new regulation on price indices in China, the “Measures for the Management of Price Index Behavior of Important Commodities and Services (Trial)”, which included index prices under supervision.

However, a number of market participants said in an interview with a Securities Times reporter that this measure is mainly aimed at indices released in China, and the supervision of the collection and application of foreign indices in China is still a "vacuum zone".

  Obviously, in the face of the iron ore pricing mechanism dominated by overseas indices, the influence of domestic pricing needs to be further improved, and the domestic steel industry has a high voice for improving the iron ore pricing mechanism.

The China Iron and Steel Association has repeatedly stated that the iron ore pricing mechanism is unreasonable. "In the context of building a new development pattern, it is urgent to strengthen the guarantee of iron ore resources and improve the iron ore pricing mechanism."

  The person in charge of a large domestic steel company told the Securities Times reporter that because the Platts index and the overseas swap market are easy to be manipulated, they are cooperating with relevant parties to actively study and launch the domestic port RMB spot price index, based on the 61% grade, with the help of Market-oriented means such as futures will promote the influence of China's index pricing.

  Some market institutions estimate that if domestic iron ore futures are priced, import costs can be reduced by about tens of billions of yuan in 2021.

Using domestic futures prices that better reflect changes in market supply and demand and expected changes will help improve corporate risk management capabilities and international price influence, and better serve the real economy and ensure stable supply and prices of primary commodities.