Financial Hedging Strategies for
Metals
We design financial hedging strategies for companies in the metals sector, aimed at mitigating price volatility in commodities such as aluminum, copper, steel, and others, aligned with each company’s commercial and financial objectives.
We work with mining, extrusion, processing, trading, and recycling companies that are exposed to prices referenced to the world’s most important benchmarks, including the LME and CME.
Commodities
Why Implement Financial Hedging in Metals?
Direct Exposure to Markets
Protection against adverse movements in cash prices and monthly averages.
Margin Stability
Reduction of imbalances between variable purchase prices and fixed-price sales.
Cost Planning
Improved budget control over the company’s metal purchases.
Operational Continuity
Lower impact of volatility on commercial and sourcing decisions.
Physical Trading of Non-Ferrous Metals
As a complement to our services, we provide access to physical trading of non-ferrous metals such as aluminum and copper, with the objective of improving supply conditions for our clients.
High Quality Supply
We work with globally recognized suppliers to ensure compliance with the highest industrial standards.
Flexible Credit Terms
We offer financing options tailored to each client’s capabilities and requirements.
Logistics and Hedging Advisory
Our team supports your planning, logistics, and hedging strategies, aligning them with your company’s financial and operational goals.
Case Study
An aluminum extrusion company that primarily imports P1020 primary aluminum to supply the construction and transportation sectors.
In 2024, aluminum prices experienced significant fluctuations due to recovering demand in China driven by fiscal stimulus and shifts in global LME inventories. In April, the LME Cash price ranged between $2,250 and $2,400 per ton, directly impacting the cost of primary aluminum purchases.
The company operates under a fixed selling price model while its purchasing costs are variable, referenced to the LME Cash price of the month prior to material delivery (M-1). This dynamic created an imbalance between costs and revenues, directly affecting operating margins.
The strategy successfully stabilized operating margins, ensuring the fulfillment of commercial commitments. Key achievements included:
Reducing the risk of price fluctuations in purchasing costs.
Providing financial stability for operations.
Strengthening the company’s reputation as a reliable partner in the supply chain.
Risk Management Training for Metals Professionals
We train finance and commercial teams to better understand metals futures markets, derivative instruments, hedging strategies, and their implementation.