Derivatives help the steel industry chain fight against “epidemic”

The epidemic situation has a great impact on the production, demand and transportation of the steel industry. Since mid-to-late January, with the spread of the new crown pneumonia epidemic, the Chinese government has adopted positive measures, including extending the Spring Festival holiday, delaying resumption of work and traffic control. , Production, demand and transportation have been greatly affected.

The epidemic has brought a more obvious impact on the production and sales of steel companies, and many steel companies have actively taken measures to reduce the impact of the epidemic. Some iron and steel enterprises can help them solve problems such as high product inventory, tight supply of raw materials, and large price fluctuations through the rational use of financial derivatives such as futures and options.

At present, China’s epidemic prevention and control has achieved positive results, and the production order of steel upstream and downstream industries has gradually returned to normal. Under the influence of the epidemic this year, the growth rate of the global economy may face a significant decline. At the same time, major global economies have launched a new round of easing policies and measures, and there is greater uncertainty in the operation of risky asset prices. The upstream and downstream steel companies should fully evaluate the potential market risk, price risk and volatility risk in production and operation activities in accordance with their own costs, orders, inventory, and funds, and select appropriate hedging strategies to reduce Certainty.


Post time: Apr-02-2020


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