Price Risk Management
Interested in hedging product price risk?
Most commodity products have high price volatility. The ill-effects of that volatility can be limited through the use of price-risk management tools, offered by banks, brokers and exchanges. Metals, agricultural products and most energy products have for years had an active price risk management market. Commodity products linked to the forest products industry have recently joined this development.
In the old times, price discovery, and with it the trading, were based on a physical delivery concept. If you did not like the price on the settlement date, you delivered or received the product itself. Nowadays, more and more products in exchanges (futures, options and other such derivatives) are traded on cash settlement basis. The so-called OTC (over-the-counter) products offered by the banks are also cash-settled. For cash-settled price risk management products, reliable indices are needed. Those indices have several other uses, too.
Hedging in detailsToggle
The NOREXECO Exchange is a Pulp & Paper derivatives exchange that will provide a transparent, efficient, and regulated market place for pulp futures contracts allowing exchange members to optimize their price exposure.
All futures contracts are cash settled against FOEX PIX Indexes and cleared by ECC (European Commodity Clearing AG). The initial products listed will be PIX NBSK Europe and PIX BHKP Europe.
The NOREXECO Exchange will provide equal conditions for all member participants, and is supported by an increased amount of global pulp and paper participants, mainly due to the benefits of:
- No credit risk
- Full anonymity
- Low transaction cost
- Increased transparency
The NOREXECO Trading Platform is provided by Deutsche Börse AG.
For further information please contact: Frederik Husebye, +47 950.99.915, fh(at)norexeco.com or Morten Tronsen, +47 995.43.631, morten.tronsen(at)norexeco.com
Please visit our website at: www.norexeco.com
Skandinaviska Enskilda Banken - SEB
SEB offers a full range of commodity services for managing commodity exposures both from a risk management and investor perspective. Our reach in commodities covers all the major sectors - from energy and agricultural commodities to industrial and precious metals. Our advisory driven approach is based on extensive analysis and understanding of our customer's business processes as well as market fundamentals.
We are also an active counterparty in pulp markets. Please do not hesitate to contact us for further information.
Finland: Jussi Lepistö, +358 9 6162 8521, jussi.lepisto(at)seb.fi
Sweden: Niclas Egmar, +46 8 506 23455, niclas.egmar(at)seb.se
Pohjola Bank is a Finnish financial services group whose mission is to promote the sustainable prosperity, security and well-being of its customers. Pohjola provides its corporate and institutional customers with a diverse range of banking, non-life insurance and asset management services, and private individuals with an extensive range of non-life insurance and private banking services.
Regarding commodity derivatives Pohjola Bank is active market participant in a wide variety of underlyings including: Pulp, Oil products, Coal, Base Metals, Carbon emissions, Agriculturals and Plastics. Pohjola Bank offers its clients commodity price risk management services with instruments like otc swaps, forwards and options. These Derivative instruments offered enable clients to reshape their commodity price risk profiles in order to support client's core business activities. For further information pls contact hyodykemyynti(at)pohjola.fi or call +358 10 252 4295
Sampo Bank PLC
Sampo financial group offers investment, savings and traditional banking services to retail, corporate and institutional customers. The group was formed at the beginning of 2001 when Sampo, a leading insurance group, and Leonia, a leading banking group joined forces, soon to be added by Mandatum, a specialist in private and investment banking. In 2002 the insurance services were integrated into a Nordic insurance group, If, of which Sampo is the largest shareholder. Sampo Bank became part of Danske Group in 2007.
Sampo has introduced trading operations in Commodity derivatives. Commodity financial product groups are: Pulp and Paper, Electricity, Energy and Weather. Sampo’s main commodity objective is to offer its client Enterprise Wide Price Risk Management Solutions. Instruments are mainly OTC structures using commonly known indexes such as PIX Indexes by FOEX Indexes Ltd as benchmark values. For further information, please contact Mr Juho Tiri: juho.tiri(at)danskebank.com: +358 10 513 8710
INTL FCStone Inc. (NASDAQ:INTL), through its subsidiaries, is a leader in the development of specialized financial services in commodities, securities, global payments, foreign exchange and other markets. Working from 40 offices across 15 countries, we help our clients access markets efficiently, manage their risk, and improve their bottom lines.
With access to more than 30 exchanges worldwide, the FCM Division of INTL FCStone Financial is a leader in the energy, agriculture, metals, and FX markets. Directly or through our sister companies, we provide clearing, execution and risk management advisory services in pulp and paper futures, pulp and paper OTC products and related currency markets. We also offer in-depth pulp and paper market news and analysis, including weather information, and FX commentary.
Please do not hesitate to contact us for more information.
Connecticut: Gary Helik (212) 485-3533
Ohio: Brian Spears (419) 373-6340