While we are used to oil prices going up and down, also other commodities like steel or even food are being traded at commodity exchange places for a long time. And whether one likes the consequences (like volatile prices) or not, any of those institutions can bring market participants from many regions together around a common liquidity pool in an otherwise (possibly) fragmented trading environment.
And exactly this kind of institution was established last year for the pulp and paper industry – NOREXECO – a regulated commodity exchange specialized for the global pulp and paper industry. NOREXECO offers trading in cash settled financial futures. These instruments are used to manage price risk for market participants like producers and consumers as well as being a trading opportunity for commodity trading firms (…a quote from Norexeco, see their web page here for more information).
If managing price risk by trading financial futures is an idea that resonates with your own business, you may want to have a look at SAP solution offerings for Commodity Management.
Minimize commodity risk – despite volatile market prices and increasingly stringent regulations – with SAP Commodity Management. SAP solutions can help you better manage commodity buying and selling– while more effectively managing risk. Integrate your processes, facilitate collaboration, make smarter business decisions, and more.
- Integrate and transform processes to reflect current best practices and market conditions
- Better understand the impact of commodity prices on purchasing and selling
- Get a consolidated, real-time view of commodity positions across lines of business
- Drive excellence across commodity procurement, sales, and risk management
- Streamline and automate procurement and sales to reduce errors and save time
- Leverage functionality for commodity producers, converters, and consumers in any industry