Commodity Proxy Hedging
Find out whether your commodity price risk can be covered.
Before anything is implemented, we measure what you are actually exposed to. The feasibility analysis works from your own purchase history, establishes whether the approach applies to your materials, and shows what it would have produced over the period your data covers.
From €3,500 per material. Result within 72 hours of receiving your completed data.
What the analysis shows
Three questions, answered on your own numbers rather than on a general model.
How high your commodity price risk actually is. Measured from your purchase history, not estimated from market averages.
Whether the approach applies to your materials at all. Some exposures can be modelled and covered. Others cannot, and the analysis is what tells them apart. This is the question the feasibility exists to answer, and a negative answer is still an answer.
If it does, how far the risk can be reduced. Not as a general claim but on your own numbers: we run the approach across the period your purchase history covers and show what it would have produced. Financial results are expected to show a risk reduction of 80 to 90 percent where the approach fits.
Those results describe how the approach behaved against prices that have already happened. They are a record, not a forecast.
Your purchase data stays with us. Neither an asset manager nor a bank sees it at any point, and that separation is part of the process rather than an option within it.
What you receive
An analysis document built on your data, one per material. It works through four things in order.
1. Your risk, quantified. We calculate the weighted average purchase price of the material to establish your specific economic exposure, expressed as a risk index.
2. The mirror that tracks it. A weighted basket of tradable instruments assembled to follow that index.
3. A year-by-year record. Across the period your data covers, your risk against the covering position, so you can see what the two actually did rather than take it on trust.
4. What it would have covered. The result for each year and across the whole period, in euros and as a percentage of the risk.
Which version you receive depends on the objective you set for that material. Hedging tracks your price risk closely, protecting the balance sheet and accepting the cash flow swings that come with that. Optimization protects the balance sheet when prices move against you, and keeps the cash flow benefit when they move in your favour. The record and the result look different depending on which you choose.
Below is a complete example for wood, in both versions, so you can see the difference before you choose.
Past results on historical prices. Not a projection, and not a promise of the same outcome for your materials.
How it works
1. You complete the form and pay. Company details, then the materials you want examined. The price is shown before you pay.
2. You receive your workbooks immediately. One per material, with everything you have already told us filled in.
3. You add your purchase history. This usually takes more than a week. It is the only step that runs on your schedule rather than ours.
4. We deliver the analysis within 72 hours of receiving your completed data.
The only long wait in this process is yours, and we add nothing to it.
What you will need. Purchase prices for each material: date, volume, unit of measure and price per unit. More than six years is the minimum that works well, and eight to ten years lets us analyse a full six. More data and more frequent data both sharpen the result.
What it costs
Each material is analysed separately and priced separately, and you receive one data workbook for each. A request covering two materials is two analyses.
€3,500
per material
Plastics, steel, paper, wood
€4,900
per material
Any other material
Payment is due when you submit the request, and the fee is not refundable. The feasibility analysis is the work, not a promise of a particular answer. If the result is that the approach does not fit your material, you receive that answer and the evidence behind it, and the fee stands. That is the risk you are taking, and it is worth knowing before you start rather than after.
If the answer is yes
Implementation is a separate step and a separate decision.
In outline: we calculate the weighting needed to cover your measured risk, an asset manager selects the specific contracts and submits them to you and to us for review, and a broker or bank executes. You review the selection before anything is executed, and the margin account shows your position daily.
The roles involved, who can see your purchase data, and what happens if you disagree with a selection are all covered in our FAQ.
Request the analysis
Company details first, then one short block for each material you want examined. Your purchase data comes later, in the workbooks we send you.
Before you submit: this payment is not refundable. If the analysis finds that proxy hedging is not possible for your material, that is the result you have paid for. You receive the answer and the evidence behind it, and the fee stands.
