Hedger’s Remorse

A large developing-country copper producer embarks on a complex multi-million tonne hedge program against forward production. Later copper prices rise and the company’s board regrets its decision. The board realizes they need the advice of people experienced in managing large hedge positions and who understand the undercurrents lying beneath commodity markets. We are asked to:

• design an adjusting program that avoids detection in an unforgiving market
• minimize the financial impact of the outcome

To maintain confidentiality and minimize financial consequences we undertake a market evaluation and plan a multi-month multi-stage strategy recommending timing and pricing to reverse the hedge.