PRICE SWINGS SPIKE INTEREST IN HEDGING
FGM Founder Jeremy Flack spoke with Metal Center News Editor Dan Markham on how the unique nature of the North American steel industry leads to price volatility.
“You have brand new mills that make fabulous products by great companies. But they don’t help you manage your price risk because they have a variable cost model,” Flack says. “The U.S. steel industry is the least polluting, it has the best products for the least amount of impact to the environment, but it’s also super volatile to buy steel.”
Flack has built his company on removing that volatility from the steel market through the use of hedging and other financial tools. It’s a practice that took years to gain a foothold in the ferrous metals world, despite its longstanding application for the supply chains for aluminum and copper.