Application Of Financial Derivatives In Risk Management Of H Steel Company

With the gradual development of China's reform and opening up market economy,the domestic economic and financial environment has become increasingly open and mature,and the market environment facing domestic enterprises has become more complex.Under this background,financial derivatives have gradually entered the vision of enterprises.In Europe and the United States and other developed countries,the application of financial derivatives to daily production and management risk management is a very common phenomenon,which has provided great help to the sound management of enterprises.But the financial derivatives market in our country starts relatively late,is affected by the enterprise to the financial derivatives cognition,the domestic enterprise in carries on the application of financial derivatives,produced certain problem,caused certain negative influence to own management.With the deepening of economic globalization,global Jinrongshichang's volatility is also more intense,and China's economy is also in a continuous downward predicament,companies should incorporate financial derivatives into their own risk management.This paper first combs the theory of financial derivatives and risk management,analyzes the basic situation of the H steel company,and finds that the main risks faced by the company are the iron ore price risk and the dollar exchange rate risk against the renminbi.An analysis of the trends of the two markets in the period 2015-2018 shows that the volatility of the markets in recent years will have a greater impact on H steel companies,and it is therefore necessary to carry out risk management through financial derivatives.A statistical analysis of the exposure of H steel companies for the period 2015-2018 shows that the main purpose of the application of financial derivatives by companies is to carry out hedging risk management;Through the annual report to understand the specific types of financial derivatives used by companies,contracts,deadlines and other factors,combined with the financial statements to analyze the fair value gains and losses of their financial derivatives,H Iron and Steel Company's application of iron ore financial derivatives has deviated from its starting point.The use of foreign exchange derivatives is more successful.This paper analyzes and summarizes the shortcomings in the application of financial derivatives in risk management of H Steel Company and puts forward corresponding countermeasures.