In the general downturn of the industry, futures have become a tool for non-ferrous enterprises to avoid risks. Because the price of lead and zinc fluctuates greatly, enterprises have great demand for value preservation.
The trend of zinc in Shanghai is active in several metal varieties, with great fluctuation and fast speed. The supply of zinc may suddenly increase and decrease, and the demand may also change greatly due to the downstream influence. In this case, the upstream enterprises can sell and hedge their value according to their own orders and raw materials, and the downstream enterprises can buy and hedge their value according to their own orders.
Lead and zinc enterprises advocate the concept of "average price", that is, no matter how the market fluctuates, enterprises will not pursue selling products at the peak of market prices. As long as the futures market price is higher than the average spot market price of product sales, it will enter the market for futures hedging.
According to this operating principle, after hedging in the futures market, taking both futures and spot markets into account, as long as the average selling price of enterprise products is higher than the annual average price in the spot market, the hedging operation will be successful.