Is there any financial product (index or steel portfolio, or derivatives) we can purchase to hedge?
2006-08-03 02:41:57 · 4 answers · asked by qhz 2 in Business & Finance ➔ Investing
short futures contracts or buy call options on a steel index. If the standardized products do not meet your needs, contact an investment banker to create a customized forward or call option.
Also, contact your suppliers & see if they are willing to let you lock in a price for a given period- of course they will charge you an extra fee or charge you a premium over the spot rate.
2006-08-03 03:07:05 · answer #1 · answered by Homer J. Simpson 6 · 0⤊ 0⤋
To the best of my knowledge, the only place where steel derivatives (more specifically, scrap metal futures) are traded is Japan. The London Metals Exchange (LME) plans to launch steel futures, but so far that has not happened.
Most companies that hedge steel prices usually so it with OTC swaps. Here's an example of one company that provides swaps in the steel market:
http://www.kochsteel.com/productsservices_swaps.htm
2006-08-03 12:07:45 · answer #2 · answered by NC 7 · 0⤊ 0⤋
Although steel futures contracts are not yet available, futures trading has been around for a long time and is used by many different industries to manage risk. The London Metals Exchange (LME) has recently confirmed that it will commence the process of developing steel futures contracts.
2006-08-03 09:47:32 · answer #3 · answered by Answer King 5 · 0⤊ 0⤋
Most commodities have a futures market, meaning that you buy the right to buy something at a pre-established price on some future date.
2006-08-03 09:46:00 · answer #4 · answered by frugernity 6 · 0⤊ 0⤋