A Study Of PM Group Nonferrous Metal Hedging Process

The price of non-ferrous metals will fluctuate dramatically in a few months,weeks or even days,influenced by macroeconomic policies and situations,the supply and demand relationship of the non-ferrous metals market itself,import and export policies,the direction of the fund transactions,exchange rates and other factors.For enterprises using non-ferrous metals as the main raw material,how to avoid risk of market price fluctuations is of great significance.Both theory and practice prove that hedging can effectively solve this problem in futures market.PM Group Company is a multinational group company providing wire and cable solutions.Its main raw materials are non-ferrous copper,aluminum and lead.PM Group has three factories in China,Suzhou,Tianjin and Yixing.Starting with the basic futures theory,this paper introduces the necessity of hedging in wire and cable industry.This paper takes copper as the research object,deeply analyses the current situation of hedging in three factories in China,and finds out the existing problems.In order to solve these problems,unified or targeted improvements are made from several dimensions,such as organizational structure,hedging process,hedging methodology solution,and monitoring and evaluation process.Set up a new metal Committee,which defines the responsibilities of various departments involved in hedging process;Unify and change hedging process from frequent daily operations to only one operation after daily aggregation and subtraction;Put forward the concept of Metal Book,which expands the horizontal and vertical dimensions of futures operation and serves as an effective tool to design and improve hedging methodology solution in the future;At the same time,Metal Position report is used to monitor the company's metal entry and exit to ensure that all metals are risk averse.Finally,other hedging schemes are explored,and solutions and suggestions for improving export orders are put forward.PM Group is the world's largest copper consumption company with a history of more than 140 years.It is very unique and advanced in metal management concepts and mechanisms,and can provide effective reference for domestic counterparts.