Soda ash futures were traded on the Zhengzhou Commodity Exchange on Dec. 6th, being the fourth product (tool) listed on the exchange this year after cotton options, jujube futures and urea futures.

Luo Hongsheng, director of the Futures Supervision Department of the China Securities Regulatory Commission (CSRC), read out the approval of Zhengzhou Commodity Exchange for soda ash futures trading at the listing ceremony.

It is understood that soda ash is an important basic chemical products, holding the reputation of "mother of chemical industry", being widely used in building materials, chemical industry, metallurgy, food, textile, medicine and other downstream fields, occupying a very important position in the national economy.

At present, China has become the world's largest producer, consumer and major exporter of soda ash.In 2018, China produced 26.99 million tons of soda ash with the demand of 25.9 million tons, both accounting for more than 40% of the total global. The export volume was 1.38 million tons, and the annual output value of the industry was close to 50 billion yuan.

"The launch of soda ash futures is a great event for the petrochemical industry and a strategic move to integrate the traditional chemical industry with the modern financial market."Li Bin, vice chairman of the China Petroleum and Chemical Industry Association, said at the listing ceremony that China's soda ash industry is in a critical period of industrial transformation and upgrading. Influenced by supply and demand, environmental protection policies and other factors, the price of soda ash has become increasingly volatile. The price fluctuation of soda ash in 2018 was more than 30%. Frequent price fluctuations have troubled soda ash enterprises and brought risks to many downstream industries. Soda ash enterprises and industry associations have repeatedly called for the early launch of soda ash futures to provide relevant enterprises with the tools to discover prices and avoid risks.

"After the listing of soda ash futures, on one hand, it can help enterprises to arrange production and operation more scientifically and reasonably through the forward price guidance mechanism of futures; on the other hand, upstream and downstream enterprises can use futures to lock in sales profit or purchase cost in advance, stabilize the profit level of enterprises and realize hedging." Li Bin said.

After the listing ceremony, the 2019 China Glass/Soda Ash Industry Seminar was held in Zhengzhou Commodity Exchange, on which industry experts and industry enterprises discussed the future development of soda ash and glass industry. Liang Jiangtao, manager of Chemical Business Division of Zhejiang Hangshi Shancheng Industrial Co., Ltd., believes that the production process of soda ash is mature, product quality is stable, and storage and transportation are convenient. Soda ash futures adopt the delivery mode of factory + warehouse + inspect-free brand, which is easy to deliver and convenient for upstream and downstream enterprises to participate. After the launch of soda ash futures, traders and other market participants can develop more abundant position combinations, such as spot arbitrage in soda ash period, inter-month arbitrage, variety arbitrage, regional arbitrage, brand arbitrage, glass-soda ash arbitrage, etc.