The Price Relationship Between Spots And Futures Aluminum Including The Risk Management Application

In the today‘s rapidly development of emerging industries, as people of variousindustrial products are increasing demanded, we are constantly faced with their owndevelopment needs and the problem of insufficient supply of resources. With the constantlyimprovement of the market economy and international trade continues to boom, thedifferent national and regional markets through international trade surplus and deficiency ofresources to solve the problem, but this has long been plagued with the market supply anddemand including the price changes by random fluctuations. Since the Chicago Board ofTrade was established in1848, people can finally through the futures market to hedgeagainst price fluctuations in the market which can reduce the business risk.This Thesis are based on the aluminum and related products, aluminum futures pricesand spot prices relationship as the focal point and guide, to explore the relationship betweenthe market price of different variation and influencing factors. The spot market includesrecycled aluminum spot market, because it is also an important component of aluminumparts. Firstly, on the domestic and international futures market and spot market maderelated to the introduction, while aluminum prices Relationship doing a literature review,followed by the relationship between the price of the relevant market to do a systematicanalysis, using econometric software for data test, get random stationary sequence, and therelationship between them and the Granger causality can be tested. Finally, from the actualneeds of enterprises, from business development and risk management in the price throughthe development of two different hedging strategies, we calculate the correspondinghedging performance and risk management methods, thus forming system hedging ideas forbusinesses to quickly make rational determine and develop to meet market pricing methodsthe law and risk control strategies offer suggestions.At the end of the paper, we analyze the conclusions of the system and summarizedfrom the point of view of practical application of China’s aluminum production. We alsodiscussed the process of enterprises to take advantage of different market mechanisms forprice setting and risk management policies. We Sincerely hoped that our companies can usethe tools of financial markets to maximize risk that can be transferred. As the risk can notbe transferred, we can make properly arranged in the long run. Only in this way, can weachieved stably production and rapidly development.