The Research On The Hedging Strategies Of J Steel Enterprise

Hedging is one of tool which evades the risk of price fluctuation. Long before hedging has been applied into the risk management by most enterprise in the developed countries, and it is regarded as a significant method for stabilizing the enterprise. However, hedging is a thriving new thing in China. Some Chinese enterprise become to use the future market for hedging the risk, and some positive effect is obtained. However, for most enterprise mistake the method of hedging, and they don’t grasp the operation technology. Not only have the enterprise not evade the risk by using the hedging, they have born the loss.Steel is the world’s largest metal materials and its price is more volatile. Both the steel production enterprise and the steel demand enterprise are faced up with the great price risk. Learn how to efficiently make use hedging for evading the price volatility risk in spot market is an important issue, since China is one of the biggest steel producer and consumer.This paper takes example by the hedging strategy of J Steel Enterprise. On the basis of risk management theory and hedging theory, I summarize its present situation and problems by utilizing the case analyzing method, the factor analysis method, the comparative analysis, and the on-the-spot observing method. Furthermore, I discuss the generation of the problem and the solving method. Finally, I designed the hedging strategy related to J Steel Enterprise.With the development of Chinese future market, enterprises regard hedging as the most important tool for strengthening its core competitiveness. Increasingly enterprises participate in future market by using the hedging, which includes a specific goal, an effective system, a reasonable organization and a feasible operation scheme. The hedging will be a part of mainstream in future.