Research On Hedging Strategy Of TH Company

Thermal coal futures listed in ZhengzhouCommodity Exchange at 2013.After 3years of development,this market become more and more mature and stable.It provides a formal risk aversion marketplace for the domestic coal enterprises.But when we look back the coke-steel industry crisis in 2014-2015,a large number of related companies' profits have suffered a serious decline.So we can find that few companies involved in futures hedging or hedging effect is not good.With the acceleration of economic globalization,major events and financial crisis may lead commodity price sharp rise or fall.TH company as a coal mining sales company,in order to resist the risk of external economy and competition from other companies or avoid systemic risk,keep steady and rapid development,participate in futures is imperative.Futures market has the unique function of price discovery and risk aversion,the futures is one kind the financial derivatives can better achieve the rational allocation of resources.Therefore,how to better understand and use the futures market's various functions,let the relevant enterprises of thermal coal industry embarked on the path of steady development,it has very important practical significance.This paper first analysis the perform of futures market through the angle of risk management theory,and come up with TH company adopt hedging can avoid risk's theoretical basics.Then,to specific analysis of thermal coal industry background and the status,related thermal coal futures situation and risk of TH company,through the analysis to the feasibility to clear the necessity of participation hedging market.At the same time,it reveals the significance,possible problems and risks for it.Finally,combing the TH company's specific production and management state and risk facing with,basing on the price information of thermal coal,the paper formulate the operable heding strategy.Using Monte Carlo Simulation to forecast analysis the thermal coal price in the furture,to estimate the effect and put forward the relevant countermeasures.The consequence of the paper is not only providing the hedging operability plan for TH Company or all thermal coal enterprises,but also making related enterprises to familiar with the finalcial derivatives risk or positive role.Turn the enterprise from seeeconomic cycle's “face” to positive operation.