| METALS | FOOD & BEVERAGE | PACKAGED GOODS | MACHINERY | HOMEBUILDERS Effectively Hedge Input Cost and Distribution Risk
Companies involved in the production of finished products face commodity price risks including power, fuel, interest rates, and foreign currency. While inefficient fixed-price supplier contracts have been used to “hedge” some of these risks, manufacturers are turning to more flexible financial hedges to manage these risks. |
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Featured Insight
Midwest Premium Buyers Should Hedge While Prices Hover at 3-Year Lows, and Demand Appears To Be Stabilizing.
Some end-users might wish to wait until the forward curve changes back into its “normal” flat to slightly backwardated shape. We would warn against this, though, as historically, the curve usually becomes backwardated during or after a significant rally.
Success Story
Metals Manufacturer Adopts State-of-the-Art Technology to Manage Risk and Maintain its Competitive Edge.
A leading metals manufacturer had clear challenges in assessing the company’s true commodity risk profile and lacked proper oversight risk since nearly all hedge-related activities revolved around one person. To top it off, that one person was managing the company’s hedge program with proprietary technology and spreadsheets.
