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What does "the factory buys copper according to the futures price" mean?
The products of this factory need a lot of copper. If the copper price rises, there is no doubt that the raw material cost of the factory will also rise. If the factory makes more copper futures at the same time, if the copper price rises, although the cost of the factory rises, it will make money to offset the cost loss caused by the price increase of some materials. On the contrary, if the copper price falls, the cost of the factory will reduce the variety of copper, but from the perspective of hedging risks, this is the cost balance strategy of the factory.