Research Carried Out China's Copper Futures Hedging Related Businesses

In recent years, with the opening up to the outside world and thenewmarket environment changing,domestic enterprises and internationalmarket are becoming increasingly closer, especially after the U.S.subprime mortgage crisis triggered by the international financialmarket turmoil and unrest, frequent domestic and internationalcommodity market price volatility in domestic enterprises, especiallytransactions involving commodity resource companies in the operationand management facing more and more unknown difficulties and risks,and increase the difficulty of the enterprise on the day-to-day riskcontrol and regulatory. Therefore, companies must find an effectiveway to prevent potential price risk and protection measures.Hedging is one of the main functions of the futures market andalso the reason for the existence of futures markets. The mainpurpose and benefit of hedging on the futures markets is to minimizepossible revenue losses associated with adverse cash price changes,That is to avoid the risk of price fluctuations, in order to achieveminimization of the risk of loss.This thesis studies the listed companies related in Copperindustries with highly internationalization background andcharacteristics of volatile and big volume of trading of their ownstock. Also it conducts analysis of the hedging operations of over30listed companies in Copper industries and identifies problems andmisunderstandings of these companies in carrying out their hedgingoperations as well as proposes solutions to these problems andunderstanding. In the analysis of the real market case, the thesistakes the example of company T, after detailed study and analysis ofits production and operations procedures, by using general theory ofhedging and taking consideration of its upstream and downstreamindustries relationships, from different perspectives of risks,designs a strategy of company T to hedge itself in futures marketagainst market exposures.