Case Study Of N Steel Company’s Hedging

The implementation of supply-side reform policies such as "de-capacity,structural adjustment,and environmental protection" in the steel industry has increased the fluctuations in the prices of steel and iron ore,which has led to rising production costs for steel companies and the risk of devaluation of inventory products.It has severely affected the production and operation of domestic steel enterprises.Therefore,avoiding the risk of price fluctuations and improving the level of risk management have become necessary prerequisites for the stable operation and sustainable development of iron and steel enterprises.Against this background,steel companies have begun to use hedging to implement risk management.However,due to the immature hedging of domestic enterprises,especially the majority of iron and steel enterprises still have problems such as a single hedging strategy and inadequate risk management system in the hedging process,which makes it difficult to smoothly implement the hedging of the enterprise,which affects the effect of enterprise risk management.This paper takes N steel company’s hedging case as the research object.As a large domestic steel enterprise,the company has certain representative problems in the hedging process.Firstly,this paper combs the theoretical knowledge of hedging and risk management.At the same time,it combines the development status of domestic steel industry and the existing risk problems,and explores the necessity and feasibility of domestic enterprise hedging risk management.Secondly,from the perspective of risk management,this paper comprehensively analyzes the risks caused by price fluctuations to N steel company,and comprehensively implements the process of N-company hedging risk management,the scheme of hedging and the effect of hedging.Analysis,find the problems that N Steel Company has in the process of hedging.Aiming at the problems of the unscientific futures hedging strategy and the incomplete risk management system of N Iron and Steel Company,this paper proposes improvement countermeasures from two aspects: improving the hedging strategy and improving the hedging management system.That is,by setting up a futures business information platform,improving the hedging and stop-loss mechanism,and strengthening the supervision of the hedging process,the company’s hedging management system is further improved;meanwhile,a single set of hedging strategies is refined,an option hedging strategy is supplemented,and portfolio hedging The innovation of the hedging strategy to meet the diversification of the hedging strategy of N Steel.It is hoped that it will play a supporting role in corporate hedging,ensure the smooth development of hedging,and enhance the effectiveness of risk management.