Further opening to the outside world to change the passive situation of commodity pricing

Recently, the two executive meetings of the State Council both "named" the rise of commodity prices, which aroused great concern in the capital market. Yesterday, commodity prices dropped sharply, and the stock market's Pro cyclical plate also made a collective correction.

The two executive meetings of the State Council have been more stringent. From "tracking analysis and doing a good job in market regulation" on May 12 to three specific measures on May 19, especially in strengthening market supervision, it is proposed to "strengthen the two-way regulation of supply and demand, strengthen the linkage supervision of futures and spot markets, timely take targeted measures to check abnormal transactions and malicious speculation", which can be described as a combination of measures and unprecedented strength.

Since last week, various regulatory measures have been implemented one after another. In the spot market, especially in steel mills, special inspections and discussions by local development and reform commissions and market supervision bureaus have been expanded from key areas. In the futures market, the three commodity futures exchanges issued notices for several consecutive days, demanding to increase the trading margin of popular trading varieties and the daily trading fees, further cooling down the trading market.

With continuous efforts by regulators to cool down, commodities are on the way back to fundamentals. However, there are still heated discussions and exchanges on issues such as pricing mechanism of bulk commodities, guarantee of raw material supply, financial attribute of raw materials, and how to coordinate domestic and foreign bulk commodity markets.

From the perspective of the global market, the relevant regulatory measures are mainly carried out in the domestic market, but the bulk commodities are naturally internationalized varieties with increasingly obvious financialization, especially individual varieties are highly dependent on foreign countries. How to do a good job in domestic and foreign market regulation is a long-standing topic.

Careful people will find that in this wave of commodity rise, on the eve of every domestic price surge, the overseas futures market is fanning the flames and fueling the flames, while the domestic market is more passive. Take iron ore as an example. In the first four months of this year, the daily average position of iron ore derivatives in the new stock exchange reached 782600, up 26% year-on-year. Compared with the same period in 2019, the daily average position of iron ore derivatives in the new stock exchange increased by 54%. At present, the position scale has far exceeded the domestic iron ore futures market.

Similarly, in the spot market, as the basis of spot pricing, the foreign proctor's index has been criticized by Chinese for a long time, but it has never been removed. Recently, at the general meeting of the raw material working committee of China Iron and Steel Association, the representatives of the meeting agreed that the proctor's index had long existed the problems of small sample size of real transactions, non disclosure and non transparency. The financialization "intensified" and seriously deviated from its spot pricing positioning, calling for this situation to be changed.

With the increasing financialization of bulk commodities, how to solve this dilemma? We should have institutional self-confidence, abandon the "self-examination thinking", abandon the deep-rooted prejudice against the commodity futures market, dare to further open up the futures market, break down the barriers for domestic enterprises, especially state-owned enterprises, to participate in the domestic futures market, and jointly promote the establishment of an open and transparent international market-oriented pricing mechanism through deep integration of industry and finance, Efforts should be made to change the passive situation of commodity pricing. Only in this way, as the largest raw material demander, China will no longer be a simple buyer, but the creator and beneficiary of the trading rules of the commodity market.