At present, China's steel industry has entered a new era of development, how to enhance the awareness of risk management, enhance the ability of risk management, and respond to market fluctuation risks with a more positive attitude? This is a major issue that needs to be considered by the steel industry and a key issue that the steel industry should focus on.

In the process of development, from small to large, from domestic to foreign, each development stage must have a suitable business philosophy and development strategy. This is a process of continuous adjustment and optimization. This should also be the case in risk management–seeking truth from facts and advancing with the times.

In the past, we responded to market risks by relying on the game between the upstream and downstream of the industrial chain and relying on administrative forces to intervene. The government actually became the main bearer of the risk of hedging. For enterprises, if the cost of raw materials is low and the prices of finished products are high, horsepower production will be increased. If the cost of raw materials is high, it will rely on the government to provide policy tilt and ensure profit levels. Such passive response can only make the risk transfer in different links, the overall stability and competitiveness of the industrial chain can not be guaranteed, and ultimately the interests of all parties will be damaged.

For China's steel industry, traditional risk management concepts and models do not match their size and international status. Strengthening risk management awareness and ability is the premise and foundation for the high-quality development of the steel industry. This is an extremely urgent and extremely realistic major issue. In order to achieve a large and strong steel industry in China, the derivatives market can play a vital role in it. Through the transfer of risks in the derivatives market, steel enterprises can effectively protect the stable operation of enterprises, promote the win-win situation of all parties in the industrial chain and form a long-term sustainable and stable relationship, thereby improving the management capability and level of the entire industry.

In recent years, we have been concerned that large steel companies such as Nanjing Iron and Steel actively participate in the derivatives market, try and explore a variety of models that use the futures market, and have achieved relatively good results, which is very useful for reference and promotion. We hope that China's steel industry will be more open and more active in the face of the derivatives market, and use futures tools.