Study On Operation Risks In Small And Medium Sized Copper Enterprises: Focus On Avoiding Price Risk

With the market economics developing, companies are facing more and more opportunities, challenges and all kinds of risks also. Different companies are facing different risks, but basically there are operation risks and financial risks. And operation risks affects quite a lot on company operation. It's an important element which needs to be considered during company's operation. Even operation risks are different for different industries because there are different characters, productions and the different operation size.Copper trade is a kind of big commodity trades. The volume, turnover, and capital of copper trade are large worldwide. And government policy affects a lot on copper trade as well. Copper price is very sensitive. It changes directly and quickly according to market supply, the change of foreign currency exchange rate, civil war, strike, coup, general election, warfare, etc. Many reasons can make copper price change a lot. And any copper price change will cause copper business many risks.Company YN is the sample company in this article. This article is going to analyze the industry situation, business size, external market environment, and company operation system base on sample study. Start from the analysis of company operation risks and the way to avoid the risks, focus on the raw material price risk that YN is mainly facing. Analyze the current method of avoiding price risk and offer some personal suggestions and talk about the problems which YN is facing now during the copper hedge operation in futures market.This article is going to analyze the operation risks during the small copper business operation and focus on price risk study. In this article, small copper business means copper products manufacturers only instead of copper trading companies. There are so many small copper products manufacturers don't pay attention on copper hedge which can help avoid copper price risk. It is going to introduce the operation method of copper hedging to small copper products manufacturers, combine with other solutions which can help them avoid the operation risks base on special characters of small business. In this case, it will help small copper products manufacturers to be more competitive in the market.