Design Of Methanol Hedging Scheme For Yuanxing Energy

Before the Methanol Futures contracts listed in our country.The methanol production enterprise don’t have the tool of hedging the risk of methanol prices rising and falling. Since methanol futures appears in Zheng Zhou on October 28,2012.Methanol enterprise have powerful tools which involved in hedging to achieve the goal of stable operation. Far Xing energy is a famous methanol production enterprise.I am participating in Far Xing energy of hedging in December 2014. The project design includes the solutions discussed in detail,the principle of this paper,and the process.on the basis of the practice of.taking part in the project.This article describes the design from the following five aspects.First, the paper estimates Far Xing energy methanol exposure of 300000 tons from the basic principle of hedging solutions and the history of the methanol prices analyzing the necessity of methanol hedging. Second, The upper reaches of the coal supply and downstream of the formaldehyde market, international methanol supply are the important factors that affect supply and demand of domestic methanol.through the analysis of the methanol production and supply and demand. Third,This paper uses fundamental and technical analysis methods to analyze the volatile prices of methanol and its influencing factors thinking that methanol prices will keep falling in late 2014. Fourth this paper builds a hedging program design from the way of hedging cost calculation,the selection of the contract, set of ratio, frequency and the evaluation of the effect of the point of view.Hedging cost estimation, according to the way of accurately calculating the hedging cost of methanol, guarantees the feasibility of the scheme. The contract choice, should choose actively high methanol futures contracts in January2015 and June 2015, and carry on short selling. Hedge ratio, according to the spot price risk exposure, should set to 30%. Reduced frequency, should take positions in the multiple price range amount, proportion and multiple risk reserve holdings. Effect assessment, through the precise calculation of maximum profit and loss, assesses the effect of hedge. Fifth,Operation risk, price risk, speculative risk is the value of the main risk.The use of var model measuring the basis risk is to determine the basis range, and The internal supervision and management system and risk control system,should be built.The emergency response mechanism countermeasures.should be established according to the basis.The outstanding characteristic of this paper is practical. Secondly this article is a complete description of methanol solution of hedging, describing the detail scheme,design principle, design process and the main link.Thirdly the paper uses the precise quantitative analysis method, such as the var model,and has strong practical guidance value.