13 JUNE 2011en.smm.com.cn
Boeing Eyes Aluminum Hedging Amid Market Volatility
Edited by : AL CIRCLE
1 min read
Boeing Co (BA.N: Quote) may decide within the next year to begin hedging aluminum prices on the London Metals Exchange (LME) in order to reduce volatility in its costs, a senior executive said on Friday.
If initiated, the company intends to use the new hedging program on its long-term agreements, John Byrne, an executive with the company's commercial airplanes unit, told Reuters.
"Given the volatility, it's hard to tie down firm fixed pricing, so we have been looking at what are the different options to bring a little bit more stability into that pricing component ... hedging the LME was one of the options we have been studying," he said.
"Within the next year was probably a reasonable time frame that we might use that option."
Boeing's consideration of hedging was triggered by a sharp rally in the benchmark LME aluminum contract CMAL3 this year. Just last month, the metal surged to $2,803 per tonne, its priciest since August 2008.
Byrne said the company preferred to maintain its long-term agreements with its suppliers, but when necessary could venture into the spot market.
If initiated, the company intends to use the new hedging program on its long-term agreements, John Byrne, an executive with the company's commercial airplanes unit, told Reuters.
"Given the volatility, it's hard to tie down firm fixed pricing, so we have been looking at what are the different options to bring a little bit more stability into that pricing component ... hedging the LME was one of the options we have been studying," he said.
"Within the next year was probably a reasonable time frame that we might use that option."
Boeing's consideration of hedging was triggered by a sharp rally in the benchmark LME aluminum contract CMAL3 this year. Just last month, the metal surged to $2,803 per tonne, its priciest since August 2008.
Byrne said the company preferred to maintain its long-term agreements with its suppliers, but when necessary could venture into the spot market.
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