Basic knowledge

BUYING COPPER - BUT SAFELY! HOW HEDGING ENABLES COMPANIES TO PLAN WITH A PREDICTABLE COPPER PRICE.

QUESTIONS AND ANSWERS ABOUT COPPER PURCHASE

As one of the most important industrial metals, copper is traded on the stock market and is subject to constant price fluctuations. For many companies, the ups and downs of the copper price poses a serious calculation risk.

Particularly for medium-sized companies having to adhere to long-term delivery contracts, fluctuating raw material prices can become a problem. SÜDKUPFER offers the possibility of making the fluctuations in the price of copper calculable by means of price hedging.

Fragen rund um den Kupferhandel – die Experten von Südkupfer können helfen

JUST WHAT IS PRICE HEDGING? AND CAN I REALLY RELY ON IT?

RAW MATERIAL PRICES FLUCTUATE. WE CREATE PRICE SECURITY IN COPPER PURCHASING.

Price hedging for copper ensures that the agreed price for a certain quantity of copper remains stable, even if the material is needed much later. This gives copper processors calculation reliability for order transactions. Even if the current copper price changes owing to fluctuations on the stock market, it will have no impact on the ordered quantity and the “hedged” copper price.

Price hedging is an elementary component of what is usually referred to as risk management. We hedge copper prices on the stock market via brokers, so that you no longer bear any risk in the event of price changes. You pre-order the desired quantity of copper at a fixed price and to a fixed date – no risk involved.

BUYING THE COPPER FOR MY COMPANY ON THE STOCK MARKET, ISN'T THAT A RISKY SPECULATION?

NO, ON THE CONTRARY: THERE IS A HIGH RISK INVOLVED IN NOT HEDGING RAW MATERIAL PRICES.

Price hedging avoids any speculative risk. If you do not hedge your raw material prices you are taking a risky gamble. SÜDKUPFER enables the copper price to be planned and minimises the calculation risk for your company, which inevitably arises due to the constantly changing copper price on the stock market.

As attractive as high-volume binding orders are, long-term delivery and price commitments always involve a certain risk. Particularly when the produced goods have a substantial proportion of raw materials, such as copper, for instance, which are subject to price fluctuations on the stock market. You can minimise this high risk of copper price development by hedging the price for the desired quantity of copper. Striving for security also entails striving for price hedging.

Fragen rund um den Kupferhandel – die Experten von Südkupfer können helfen
Fragen rund um den Kupferhandel – die Experten von Südkupfer können helfen

BUT I NEED THE COPPER LATER AND WOULD LIKE VARIOUS PARTIAL DELIVERIES - IS THAT POSSIBLE DESPITE PRICE HEDGING?

YOU ARE STILL FLEXIBLE IN TERMS OF DELIVERY QUANTITY, DELIVERY DESTINATION AND DELIVERY DATE – GUARANTEED!

The purchaser determines where and when the copper is to be delivered according to his requirements and production processes. Of course, SÜDKUPFER as an experienced expert in copper trading, subsequently ensures the reliably delivery of the desired quantity.

You buy copper from us at a hedged price and provide it to your preferred upstream supplier for further processing. This takes place absolutely reliably and safely in coordination with us. You alone decide the quantity, date and destination – we ensure functioning logistics. Of course you also determine the price for the processing of the copper by the upstream supplier yourself and settle the associated invoicing directly with said upstream supplier.

The decisive point here is that there is a fixed copper price for this batch, meaning that you have a calculable factor.

HOW LONG DOES THE TRANSACTION TAKE FROM THE REQUEST TO DELIVERY? CAN I ALWAYS RELY ON TIMELY DELIVERY?

ALL COPPER HEDGED ON THE STOCK MARKET BY SüDKUPFER WILL LATER BE PHYSICALLY DELIVERED.

We have been in the copper business for more than 30 years and cooperate with almost all well-known producers. Of course, we also hold sufficient copper stocks there and organise the continuous supply to producers and processors. This stockpiling usually enables you to receive the ordered quantity of copper on the date of call at the desired delivery destination.

This procedure is called tolling. The basis of tolling is the separation of copper price and processing price. You buy the copper at the hedged, specified price from us, and we ‘provide’ it on the desired dates to your upstream suppliers. To enable you to track this procedure reliably at all times, a record is kept of the transfer of ownership via copper accounts. These copper accounts show in an easily comprehensible manner what volumes have been called and which processor received the delivery at which time.

Fragen rund um den Kupferhandel – die Experten von Südkupfer können helfen