Protection today against price volatility tomorrow. Metal prices are inherently volatile, making business planning a complicated and risky exercise.
Hedging is the process of offsetting the risk of price movements in the physical market by
locking in a price for the same commodity in the futures market. In hedging an organisation is
able to lock in an acceptable forward price, this may mean it forgoes windfall profits, but it
equally protects the organisation against any windfall losses and enables it to decide on the
amount of risk it is prepared to accept.
TIASCO’s specialist price risk management team employs a range of derivative tools that can help to manage exposure to physical market price fluctuations and they would be pleased to hear from you.
Please contact us for further information.
If you want to see some examples of how hedging could work for you, please have a look at the LME steel futures hedging simulator by clicking here.