{"id":6422,"date":"2024-12-11T06:03:05","date_gmt":"2024-12-11T06:03:05","guid":{"rendered":"https:\/\/www.alcircle.com\/blog\/?p=6422"},"modified":"2024-12-11T06:03:34","modified_gmt":"2024-12-11T06:03:34","slug":"hedging-with-jorge-episode-15-understanding-contango","status":"publish","type":"post","link":"https:\/\/www.alcircle.com\/blog\/hedging-with-jorge-episode-15-understanding-contango","title":{"rendered":"Hedging with Jorge #Episode 15: Understanding Contango"},"content":{"rendered":"\n<p>We\u2019ve learned that futures markets can show prices for immediate delivery and prices for a future date. When the prices for a future date are higher than nearby prices, this is known as a \u201ccontango\u201d situation.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"youtube-embed\" data-video_id=\"OvoknomGzbE\"><iframe loading=\"lazy\" title=\"Hedging with Jorge #Episode 15: Understanding Contango\" width=\"696\" height=\"392\" src=\"https:\/\/www.youtube.com\/embed\/OvoknomGzbE?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>Imagine you\u2019re a producer needing to sell into the futures market to hedge and protect your business. If you\u2019re facing a contango curve, where future prices are higher than current ones, it means your hedge will result in a higher outcome. Essentially, you\u2019re set to make a profit.<\/p>\n\n\n\n<p>When it comes to aluminium, the market is often in a contango situation. This consistently benefits producers by allowing them to secure profitable hedges.<\/p>\n\n\n\n<p>However, not all metals behave the same way. Take copper, for example, it traditionally had backwardation, where future prices were lower. But after a certain point, possibly around September or October, the pricing structure shifted, and copper also moved into contango.<\/p>\n\n\n\n<p>For aluminium producers, this kind of price curve is great news. But what about consumers? We\u2019ll explore their side of the story next time!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We\u2019ve learned that futures markets can show prices for immediate delivery and prices for a future date. When the prices for a future date are higher than nearby prices, this is known as a \u201ccontango\u201d situation. Imagine you\u2019re a producer needing to sell into the futures market to hedge and protect your business. If you\u2019re [&hellip;]<\/p>\n","protected":false},"author":89,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-6422","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-open-forum-for-aluminum-community-blog"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hedging with Jorge #Episode 15: Understanding Contango<\/title>\n<meta name=\"description\" content=\"When it comes to aluminium, the market is often in a contango situation. This consistently benefits producers by allowing them to secure profitable hedges.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.alcircle.com\/blog\/hedging-with-jorge-episode-15-understanding-contango\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hedging with Jorge #Episode 15: Understanding Contango\" \/>\n<meta property=\"og:description\" content=\"When it comes to aluminium, the market is often in a contango situation. This consistently benefits producers by allowing them to secure profitable hedges.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.alcircle.com\/blog\/hedging-with-jorge-episode-15-understanding-contango\" \/>\n<meta property=\"og:site_name\" content=\"AL Circle Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AlCircle\" \/>\n<meta property=\"article:published_time\" content=\"2024-12-11T06:03:05+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-12-11T06:03:34+00:00\" \/>\n<meta name=\"author\" content=\"Jorge Eduardo Dyszel\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@alcircle\" \/>\n<meta name=\"twitter:site\" content=\"@alcircle\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jorge Eduardo Dyszel\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/hedging-with-jorge-episode-15-understanding-contango#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/hedging-with-jorge-episode-15-understanding-contango\"},\"author\":{\"name\":\"Jorge Eduardo Dyszel\",\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/#\\\/schema\\\/person\\\/64371a8562aa8589375f4f9a8c08a9f6\"},\"headline\":\"Hedging with Jorge #Episode 15: Understanding Contango\",\"datePublished\":\"2024-12-11T06:03:05+00:00\",\"dateModified\":\"2024-12-11T06:03:34+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/hedging-with-jorge-episode-15-understanding-contango\"},\"wordCount\":191,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/#organization\"},\"articleSection\":[\"AL Circle\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/hedging-with-jorge-episode-15-understanding-contango#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/hedging-with-jorge-episode-15-understanding-contango\",\"url\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/hedging-with-jorge-episode-15-understanding-contango\",\"name\":\"Hedging with Jorge #Episode 15: Understanding Contango\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.alcircle.com\\\/blog\\\/#website\"},\"datePublished\":\"2024-12-11T06:03:05+00:00\",\"dateModified\":\"2024-12-11T06:03:34+00:00\",\"description\":\"When it comes to aluminium, the market is often in a contango situation. 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