Shuikoushan Nonferrous Metals Group Co., Ltd. Futures Hedging

This thesis firstly gives a brief introduction to the traits of futuresmarket and the present situation of research on hedging both in domesticand foreign countries.Then it analysizes the effects that the futuresmarket brings to Chinese economy. The necessity and feasibility of usinghedging to control the cost in the Shuikoushan Nonferrous Metals GroupLtd("the SKS") are deeply discussed in this dissertation. In the author'sopinion, hedging will help the SKS fix the cost, evade risk and finally getout of the difficult situation brought by the extention of production cycleand price fluctration of raw materials and products. At the sametime, based on the analysis of the risk of futures market, it points out therisk of using hedging in the SKS and gives out some solutions to preventrisk. By relating theroies in management to the present situation of theSKS, a profound analysis on how to use hedging to evading price risk isgiven by the author. And the rules of using hedging and the strategies ofhow to put hedging in practice are also been established. At the end ofthis thesis, it points out the steps and serveral cautions in theimplementation of hedging.