Today, we’re diving into the basics of hedging. You might ask, what is hedging? Well, let me break it down for you. Every day when we wake up, we speculate a little, will it rain, or will it be cold? We check the weather, and based on our analysis (think of this as studying the market), we make decisions to protect ourselves. This simple decision-making process is hedging.

If we expect rain, we carry an umbrella. If it’s cold, we wear a sweater. In the world of aluminium, hedging works the same way. When we face risk, there’s always an option to protect against it. For instance, if you’re a consumer of aluminium and you want to avoid market price fluctuations, there is a tool for that: hedging.

You can buy aluminium in the futures market. While you don’t receive the physical aluminium, this financial transaction ensures full protection against price volatility. In this column, I will walk you through all the tools and strategies available to help you navigate risks in the aluminium market.

Thank you for joining me on this journey. I look forward to sharing more in our upcoming posts.

About the Author: Jorge Eduardo Dyszel has over four decades of experience in risk management and is one of the world’s leading consultants in base metals and the London Metal Exchange (LME). From his CPA roots in Buenos Aires to working with global leaders like Aluar Aluminio Argentino and Glencore, Jorge has shaped industries across 15 countries. As the sole Latin American and Spanish trainer for the LME, Jorge has educated countless professionals, and his commitment to advancing knowledge continues through his work with institutions like the ARZYZ Hedging School and ALUAR Academy.