Why hedge? The simplest answer is one word: Certainty. Beginning in 2004, the impact of imports and increasing electric arc furnace (EAF) production has made the US market one of the – if not the – most volatile steel markets in the world. That volatility is only increasing, as the current rally proves. The proper use of futures and options can combat that volatility, providing certainty to producers, distributors and consumers of flat-rolled steel.
Too many steel buyers hope for a market change based on emotions, reluctant to acknowledge the need or ability to obtain price certainty, Flack Metal Bank (FMB) empowers OEMs to seek protection from large price swings with a process modeled from the successes we’ve proven via our own practices at Flack Global Metals (FGM).
- We’ve saved our hedging clients over $540 per ton over the spot price so far in 2021.
- Buyers who passively used the HRC futures curve in 6-month cycles saved an average of $107/ton between 2013-2020.
- 25% of all hedges placed on the CME for HRC futures are currently coming from Flack Metal Bank.