Cable companies should focus on risk management tools

On the afternoon of November 8, 2012, the "2012 Wire & Cable Industry Transformation and Upgrading Summit Forum" was hosted by Dongguan Wire and Cable Industry Association and Cable Network and was held in Dongguan, Guangdong. Zhang Ao, Senior Analyst, Minmetals Futures Institute, gave a keynote speech on “The Use of Risk Management Tools in the Wire and Cable Industry”.

Zhang Ao elaborated on the use of risk management tools in the wire and cable industry from three aspects: the role of wire and cable companies, the risks they face, the core issues of current hedging, and the understanding of price fluctuations. He believes that the role of wire and cable companies and the risks they face are mainly reflected in: product sales cycle risk, product quality risk, industry competition risk and raw material price fluctuation risk.

Zhang Ao said that ignoring the demand side of the copper price process will be seriously affected by the downside risks caused by the cyclical fluctuations of the macro-economy; neglecting the cyclical characteristics of scrap copper supply during the copper price decline process will cause serious upside risks. .