Research On Raw Material Price Risk Management Of X Metal Processing Enterprise

Since the outbreak of COVID-19 in 2020,the global industrial system has faced tremendous shocks and challenges.Accompanied by the conflict between China and the United States and the technology embargo against China,the US Federal Reserve’s monetary policy of raising interest rates and shrinking the balance sheet has led to dramatic fluctuations in the prices of various commodities around the world.This has also resulted in a significant drop in profit margins for many processing and manufacturing enterprises.The soaring and plummeting raw material market not only intensifies the cost pressure on enterprises but also prolongs the overall product supply cycle of suppliers.As upstream metal raw materials closely related to the entire industrial chain experience price leaps,they have a significant impact on the prices of downstream end products in the entire industry.The metal processing industry,due to the shortage and instability of raw material prices,is driving more and more enterprises to seek technological reforms to cover the enormous input costs.At the same time,an increasing number of metal processing enterprise managers have begun to realize the importance of corporate risk management.This paper focuses on the current risk management status of metal processing enterprises,first introducing risk management theory and related literature.It then takes metal processing enterprises with disadvantages in proactivity and competitiveness as the industry background and uses X Metal Material Processing Enterprise as a typical case study to explore risk management issues in raw material price fluctuations.Before the procurement and transportation of raw materials,managers of small metal processing enterprises need to have a certain understanding of the overall trend of future raw material prices,including national rare metal control policies.They should make reasonable early-stage forecasts of raw material prices by considering market mechanism factors,environmental factors,regional factors,and international factors.For those unquantifiable parts among these factors,corresponding prediction systems and historical data analysis should be used for fuzzy forecasting.The paper obtains relevant sample data through a series of questionnaires and establishes a risk cost control management optimization model by combining corresponding raw material prices.It sets up appropriate risk control indicators and rationally optimizes the entire raw material procurement and inventory decision-making process,incorporating corresponding random variables for simulation analysis.The paper also conducts a detailed analysis of macro strategies and price factor adjustments in enterprises by taking the raw material procurement strategy as the entry point.It optimizes inventory in an imperfectly competitive market and controls and manages continuous,uninterrupted procurement risks within the same time period.The paper proposes a series of countermeasures for metal processing enterprises to cope with the risks of raw material price fluctuations,including using corresponding financial derivative instruments to hedge against raw material prices,effectively ensuring the profit margin of enterprises.