Core Viewpoint - In 2024, the pulp industry in China is undergoing a deep adjustment and transformation amid complex internal and external environments, with significant price fluctuations impacting companies' operations [1] Group 1: Market Trends - In the first half of 2024, pulp prices showed a clear upward trend, leading to optimistic market expectations [1] - However, after high-level purchases of pulp by Company X, prices fell, resulting in inventory losses and increased storage costs [2] Group 2: Company Strategy - Company X, established in early 2020, began forming a pulp trading team by the end of 2021, achieving an annual trading volume of 340,000 tons and a trading value of 1.7 billion yuan [1] - The company engaged with Huazhong Futures to develop risk management strategies, leading to the establishment of a professional futures team and a strict hedging system [1][2] Group 3: Risk Management - Company X's hedging volume increased from approximately 18,000 tons in 2021 to 36,000 tons in 2023, demonstrating effective risk management through futures and options [2] - In response to market downturns, the company sold its existing inventory at market price to recover funds and mitigate further losses [3] Group 4: Derivative Tools Utilization - The company utilized options to hedge risks, converting inventory into option positions to avoid storage costs while generating premium income to offset previous losses [3][4] - Company X adopted a dual strategy of selling both put and call options to manage its positions effectively, thereby reducing holding costs and protecting against price fluctuations [4] Group 5: Future Plans - Looking ahead, Company X plans to expand its risk management toolbox by integrating futures, options, and basis trading, aiming to build a hedging alliance within the pulp industry [5] - The company seeks to enhance its risk management capabilities, transforming them into competitive advantages in the industry, and contributing to high-quality development in the pulp sector [5]