Design of price fluctuation mechanism and risk prevention and control strategy in China's imported coniferous logs market

Abstract

Wood is one of the world's four most recognized raw materials, and is the main means of production for national economic construction and an indispensable means of living for people's lives. With the development of the national economy, the continuous improvement of people's living standard, and the deepening of the concept of green development and the gradual promotion of building a beautiful China, the demand for wood will continue to increase. At present, China is one of the countries where timber resources are very scarce, and the supply of timber relies heavily on imports, following only to oil and soybeans. China's domestic timber production has undergone a huge change from fulfilled basic market demand in the past to a large unfulfilled market demand now, requiring a large amount of timber imports from timber-rich countries in the world to supplement the huge gap in market demand. The Chinese timber industry as a whole is currently at the bottom end of the industry chain, and China has no say in international timber price fluctuations, bringing huge risks to the overall operation of the Chinese timber industry. Therefore, the study of the law of price fluctuations in the imported log market has positive guiding significance for the healthy development of China's timber industry; the design of financial products and the construction of trading platforms for the Chinese timber industry to avoid production and operation risks and reduce operating costs for enterprises, which has important practical significance for the overall healthy development of the timber industry. As a strategic resource for China's national economic development, timber resources play an important role in the implementation of China's sustainable development strategy and the "carbon neutral" strategy, but a review of timber consumption and production in China over the past decade or so shows that there is a serious lack of timber supply in China. In order to meet China's timber demand, this imbalance between supply and demand has led to the need for China to import large amounts of timber from abroad, especially coniferous timber, which has had an impact on China's economic development and economic stability. In addition, the coupling analysis of China's coniferous log imports and total social demand reveals that the degree of coordinated development between coniferous log imports and total social demand began to shift from uncoordinated to barely coordinated in 2017, which is a good sign for China's economic development and economic stability. This topic focuses on the price volatility characteristics and risk measures of the Chinese imported coniferous logs market, and constructs a model to describe the price volatility characteristics and risk measures. Firstly, the price volatility characteristics of the Chinese coniferous log market are empirically studied through GARCH model and GJR-GARCH model, and it is found that the Chinese coniferous log market prices show asymmetry. Then, this topic measures the price risk of China's imported coniferous log market by constructing VaR-GARCH and VaR-GJR-GARCH models, and the risk is measured and studied by means of quantitative analysis. Finally, the accuracy and reasonableness of the model estimation is measured by the failure rate test method. This study addresses the impact of special events on the market price of imported coniferous logs in China. The X-12 seasonal adjustment model, H-P filter model and dummy variable model were constructed, as well as Pearson correlation analysis was conducted to study the variables of imported coniferous logs market prices, and a comprehensive analysis of the changes in imported coniferous logs market prices was carried out, and the following conclusions were drawn: Chinese imported coniferous logs market prices show an up-and-down trend in general, seasonal components cause their prices to flacturate. The market price of imported coniferous logs contains cyclical characteristics; holidays, rainy seasons, etc. will have an effect on prices in the short term, but their impact will gradually decrease over time; fires also have a significant impact on the market price of imported coniferous logs. This topic provides a theoretical analysis of the macroeconomic environmental factors of imported coniferous log market price fluctuations, including five aspects: forest resource factors, timber supply factors, timber demand factors, timber trade environment factors and other factors. An empirical modal decomposition model is established for the market price of imported coniferous logs, and a correlation analysis model and a regression analysis model are established between the decomposition results and the factors influencing the market price of imported coniferous logs to explore the laws underlying the fluctuations of each component of the market price of imported coniferous logs in China. The unregulated development of China's timber spot market and the high risk of price volatility are not conducive to China's timber pricing power in the international market. The topic ultimately comes down to how to mitigate the risk of price volatility in China's imported coniferous logs market, mainly in terms of mitigating the risk in the process of commodity trade financing, building a trading platform for the timber futures market, and conducting research on timber futures product design, and further discussing the design of futures contracts and contract indicators. This topic innovatively proposes the way of using electronic warehouse receipts to reduce financing risks, the unified index system of timber quality standards and inspection sampling system, and the online bidding and trading mechanism of timber to establish a timber futures market trading platform, and carries out innovative designs in timber futures contracts, the selection of futures underlying, the selection of delivery location, the determination of quality standards, and the determination of up and down stops and margin ratios, which have groundbreaking significance for the development of China’s timber futures and the design of timber futures products are of.