Study On The Futures Hedging Scheme Design Of South Building Materials Company

In the recent years, influenced by the macroeconomy of the international and domestic, especially under the background of there had bubble in the real estate in China, the price of construction materials varied volatility. In order to reduce the risk of price, we must increase the value of the underlying assert urgently. The function of price finding and risk aversion of future market make itself interested by the relevant iron and steel enterprises more and more, and these enterprises use futures to hedge instruments actively, which be good at their healthy development. However, in the practise of future operation in China, because of the vacancy of the systemic operation system, there have many failure case in future marker in China, such as copper", "CAO",etc. These facts expose many deep-seated problems in China. So how to make good use of the future market, let the the steel industry develop into a sustainable cycle and control the risk,have great significant in practise.Based on the the relevant management theory, and combined with the practise of future operation in international and domestic steel industry, this article explain the conception,characteristic and significance of the steel futures hedging business firstly. Then focused on the analysis of the futures hedging model of traditional hedging method,mini OLS and asset-based hedging. Then this article focuses on the analysis of problem existed in the future operation practise of South Building's steel corporation, and give some advise about it. Based on the analysis of the operation problem in the South Building's steel corporation, we point out the problem which should be pay attention to in the future hedging operation in steel trading business. We hope this article do well for the steel production and distribution companies, which make a dominant position in the national economy.