Copper prices correlation with global market

algotrader

I have observed that indian copper prices follow LME very closely. But sometimes there is big gap when rupee moves significantly. How do you guys hedge this risk in copper trading? Currency futures or just take the risk?

algotrader

Reply by: HedgingExpert_Delhi
We use currency futures to hedge rupee risk on our metal positions. Its not perfect hedge but reduces risk significantly. Also timing of imports matters, if you can time when rupee is strong you can get better landed cost. Need to watch both LME and USD-INR closely.

algotrader

Reply by: Kolkata_Importer
Another option is back to back contracts where you lock in price with supplier and customer simultaneously. No risk but also no profit opportunity. Depends on your risk appetite and working capital situation.