The Study On The Relationship Between Coal Futures Market Price And Spot Market Price In China

Coal prices fell sharply since 2012, the coal enterprises had suffered huge losses. The function of futures market shows in two aspects: price discovery and risk-averse. After the introduction of coal futures products in the futures market, coal enterprises can realize the risk transfer and control the loss in a certain range. Before using the coal market to avoid price risk, we should find out whether there is a relationship between the price of the coal futures market and the spot market price. If so, what way do they interact with each other? However, we still can’t answer these questions at present. So it is necessary to research on the relationship between the coal futures market price and spot market price on the basis of previous studies.This paper focuses on the study of the relationship between the coal futures market price and spot market price. In the first part, it describes the coal futures market and spot market theory, laying the theoretical foundation for the whole study. In the second part, it describes the running situation of the coal futures market and spot market based on some data and charts. In the third part, it analyzes the price mechanism between coal futures market and spot market. We know that the coal spot market affects the price of the futures market through the relationship between coal supply and demand and physical settlement. The futures market affects the coal spot market through locking the transaction cost, providing hedging mechanism and finding the expected price. In the fourth part, it makes empirical research on the relationship between coal futures prices and spot prices using Cointegration test, Granger causality test, and variance decomposition econometric methods and draws some conclusions. Firstly, there is a long-term equilibrium relationship between coal futures price and spot price. secondly, coal futures price has a great influence on the spot price of coal, but spot coal has very little effect on the coal futures price. At the end of the paper, it proposes some measures to develop the coal futures market and spot market, such as promoting a standardized coal spot market, improving the development of the coal futures market and perfecting the legal system of the spot market and futures marketThe innovations of this paper are as follows: domestic and foreign scholars research mainly concentrated in the cotton, sugar and other physical futures market and spot market prices, and few people choose to study the relationship between the coal futures market and spot market price. This paper combines qualitative analysis with quantitative analysis and studies the relationship between the coal futures market and spot market price. We can draw a conclusion that the interaction between the two prices shows a symmetry linkage effects between the coal futures and spots prices and the effects of coal futures price on the spot price is far greater than the effect of the spot price on the coal futures price.