Recently, an exchange event titled "Shanxi Listed Companies Visit Zhengzhou Commodity Exchange" was held in Zhengzhou. This event was jointly organized by the Zhengzhou Commodity Exchange, the Shanxi Futures Industry Association, and the Shanxi Listed Companies Association. The event aimed to help listed companies better understand the futures market, manage risks in a timely manner, and enhance their risk-resistance capabilities. Executives and key personnel from numerous listed companies in Shanxi Province attended the event. Relevant business departments of the Zhengzhou Commodity Exchange provided detailed introductions to the attendees, covering the development history and functions of the futures market, the operation of various products on the Zhengzhou Commodity Exchange, and how it serves real-economy businesses.
In a speech, a relevant person in charge of the Shanxi Listed Companies Association stated that listed companies are important pillars of the national economy. Currently, China has a large number of listed companies, with significant room for growth. For listed companies to further improve quality and enhance core competitiveness, leveraging financial tools to manage corporate risks is crucial and necessary.
A relevant person in charge of the Shanxi Futures Industry Association also noted that listed companies are a vital force driving China's economic growth. In recent years, due to increased global economic uncertainty and external factors, the bulk commodity market has shown high volatility, gradually increasing the impact on the raw material costs of listed companies. To cope with the pressure and impact of bulk commodity price fluctuations on company operations, more and more listed companies have expressed a strong need for risk management and have actively used futures derivatives for hedging, thereby improving their risk-resistance capabilities. Listed companies span various sectors of the national economy, covering multiple links in the industrial chain's upstream and downstream, and are closely linked to numerous commodity futures products; effective risk management is therefore crucial. They hoped that this training would help guide listed companies to establish an awareness of futures as a critical tool for corporate risk management, foster a correct understanding, encourage early learning and strategic planning, and establish teams and risk control systems.
The steady development of the domestic futures market relies on the rule of law and government policy support. The Futures and Derivatives Law, formally promulgated and implemented in 2022, explicitly encourages the use of futures markets and derivatives markets for risk management activities such as hedging. The Central Economic Work Conference and the Central Financial Work Conference have also set overall requirements for the futures market to serve the real economy. Furthermore, the Shanxi Provincial People's Government's "Implementation Opinions on Accelerating the Development of the Capital Market" encourages relevant enterprises in Shanxi Province to effectively utilize the price discovery and hedging functions of the futures market. The favorable policy environment has created a positive market ecosystem for companies to use futures tools for hedging.
A person in charge of a participating company told Futures Daily reporters that the company has long utilized the futures market for hedging operations, aiming to effectively mitigate the risks of market price fluctuations and achieve stable business operations. On the one hand, the pricing of upstream and downstream products in the non-ferrous metal smelting and processing industry refers to futures prices; on the other hand, the company, in addition to self-produced copper ore, relies heavily on imported copper raw materials, earning profits from processing fees.
The reporter learned that on the same day, the guests visited the Futures and Derivatives Museum at the Zhengzhou Commodity Exchange. Subsequently, they visited Henan Tongzhou Cotton Industry Co., Ltd. (hereinafter referred to as Tongzhou Cotton) for in-depth exchanges and discussions on the company's use of futures and derivative tools. Zhao Nana, Vice President of Tongzhou Cotton, detailed Tongzhou Cotton's history and methods of participating in futures and options, noting that Tongzhou Cotton has maintained steady progress amidst significant market fluctuations by using cotton futures.
“Through this event, we felt the original aspiration and mission of the Zhengzhou Commodity Exchange to serve the real economy, assist farmers, and benefit agriculture using financial derivatives,” said the person in charge of the aforementioned participating company. They also pointed out that Shanxi enterprises still need to further strengthen the use of futures and derivative tools, and there is a lack of innovation and means in managing corporate risks, requiring further support from futures industry associations and exchanges in terms of system and mechanism construction. “Enterprises need to establish systems, standardize operations, and implement scientific assessments to fully utilize the futures market for price discovery and risk management, ensuring the steady and far-reaching development of their production and operation,” they said.
It is worth mentioning that in recent years, the Zhengzhou Commodity Exchange has implemented a series of measures centered around serving the real economy. Taking service to listed companies as an example, firstly, it has collaborated with local government departments and local securities regulatory bureaus to hold risk management training sessions for listed companies in more than 20 provinces (municipalities and autonomous regions) across the country. Tailored courses are designed based on the characteristics and needs of listed companies in different regions to provide continuous futures solutions for listed company risk management. These series of activities have cumulatively covered nearly 2,000 listed companies, and will continue to be held. Secondly, it has joined forces with the Shanghai and Shenzhen Stock Exchanges to synergistically support the high-quality development of listed companies. On the one hand, it has cooperated with the Shanghai and Shenzhen Stock Exchanges to launch more than 30 futures business courses on the Shanghai Stock Exchange's "Pujiang Lecture Hall" and the Shenzhen Stock Exchange's "Innovation Growth Academy"; on the other hand, it has cooperated with the Shenzhen Stock Exchange to hold executive futures training courses at the Capital Market Academy, cumulatively providing systematic futures business training to nearly 200 executives of listed companies from more than 20 provinces (municipalities and autonomous regions) across the country. Thirdly, it has partnered with the China Listed Companies Association to conduct extensive market research and surveys among companies, understanding the pain points and difficulties faced by companies in participating in the futures market, focusing on the practical application of hedging business, and continuously conducting training sessions on topics such as hedging accounting and futures business information disclosure in Beijing, Zhengzhou and other places, effectively enhancing the companies' hedging financial processing level and information disclosure quality.
A relevant person in charge of the Zhengzhou Commodity Exchange stated that the Zhengzhou Commodity Exchange will continue to adhere to the service philosophy of "market first," prioritizing the needs of listed companies and broader real-economy businesses, better leveraging the service functions of the futures market, and supporting the high-quality development of listed companies.
