Research On The Problems And Countermeasures Of Jiangxi Copper's Hedging Business

As one of the important strategic resources of the state,the price of copper is subject to the influence of various factors such as national policy,international situation,market supply and demand and so on.How to mitigate the adverse impact of price volatility on production and operation is the primary problem facing copper enterprises.From years of practical results,hedging business is one of the most commonly used and effective means for copper enterprises to avoid price risk.However,improper hedging operation will magnify the price risk of enterprises,bring potential hidden trouble to the sustainable operation of enterprises,and thus cause greater economic losses of enterprises.However,the establishment of futures market in China is relatively short,and the development of market supervision,trading system and other related infrastructure is relatively insufficient.In addition to macro factors,enterprises' insufficient understanding of hedging theories,inaccurate positioning of hedging strategy,supporting internal control system and information disclosure system and lack of relevant professionals also affect the expected hedging effect.Jiangxi copper industry,as one of the early domestic copper enterprises,is also one of the earliest companies to carry out hedging operation.However,according to its 2017 annual report,the enterprise suffered a huge loss when operating with the hedge instrument,which had a significant adverse impact on the current profit of the enterprise.In the 2018 annual report,the item bar of hedge instrument is shown as net income,which increases the current net profit of the enterprise.Whether the futures market unilaterally affects corporate profits or whether the hedging business has such a huge impact on profit fluctuations due to internal reasons.The essence of hedging is to lock corporate profits to avoid price risks.It is worth pondering why the profit fluctuation of jiangcopper increases after hedging.This paper mainly USES case analysis to analyze the hedging business of jiangtong company.In the last five years of the company's relevant hedging projects,combined with risk hedging,internal control and other relevant methods for comparative analysis.Through the research of hedging business related,cooper found hedge means company with a single,imperfect internal risk control process as well as hedging problem such as the mechanism of talent cultivation is not mature,according to the project risk of exposure problems respectively on company level and the government level to establish the comprehensive risk management information system,combining various hedging strategies,strengthen personnel training and information disclosure mechanism,the futures related law and regulation system,increase the hedging participants such as targeted Suggestions.So as to improve the internal control of enterprises,improve the level of risk management,promote the development of hedging theory.