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What is the significance of soda ash listing

Soda ash futures were listed for trading on the Zhengzhou Commodity Exchange on December 6, 2019. The listing of soda ash futures is of great significance to the soda ash industry. On the one hand, it helps to improve the efficiency of price discovery in the soda ash industry; on the other hand, it can help companies avoid operational risks. After soda ash futures are listed, continuous, open, authoritative, and transparent futures prices can be generated through trading, which can provide an effective reference for market agreement prices and help industry chain companies to timely capture the factors that affect soda ash prices. Changes in order to achieve early prediction, timely response and accurate response, and promote the healthy and stable development of the industry.

In addition, through the forward price guidance mechanism of soda futures, the industrial chain can rationally arrange production and operation and optimize resource allocation. Since the futures price formation mechanism can cover the current and future macro information, supply and demand information, soda ash futures prices can usually reflect market operations more effectively than spot prices and are an effective tool. Allocate resources to the market. Taking the production of flat glass as an example, the purchase cost of heavy alkali accounts for more than 25% of the production cost of float glass, and enterprises are very sensitive to soda water price fluctuations. However, due to the lack of effective hedging tools, some companies can only be forced to use the way to avoid market risks, which not only takes up a lot of funds, but also has high storage costs, which is not conducive to the healthy development of the industry.

After the soda ash futures are listed, upstream and downstream companies can hedge through the futures market, use the leverage of futures trading margin, and use less funds to achieve hedging and stabilize the profitability of the company. The listing of soda water futures can further improve the related industry chain futures system and increase the breadth and depth of the futures market in serving the building materials industry.

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