Natural Gas (nat gas) is a commodity that touches many segments of the manufacturing industry. Companies who consume, produce, transport, distribute, store, and further process natural gas are all subject to the price volatility and basis risk inherent in this highly volatile commodity. This volatility makes hitting budgets and managing profitability a very difficult process.
The FCStone Nat Gas Consultant Team works with many different types of companies to control the price volatility inherent in natural gas. Types of customers who utilize FCStone risk management services are the following:
Retail consumers
Natural gas producers
Utilities
Large institutions like universities and government
Storage operators
Ethanol plants
Steel and chemical producers
Fertilizer producers
Deregulated power buyers, where natural gas and electricity are correlated
The FCStone nat gas consultant team uses a variety of sophisticated financial tools to manage the volatility of nat gas. These include exchange based products, OTC’s, basis swaps, and commodity/weather contingent options. For some companies our consulting advice includes recommendations on purchasing physical nat gas. The result of our work is to help remove the volatility, and manage the nat gas risk within budgetary constraints.
The FCStone team works hard to understand nat gas usage and purchasing history by location for our customers. We then develop quarterly strategic plans for purchasing and hedging the natural gas and basis risk.
For companies that have little or no formal experience in management of natural gas, our team works to help create policies on corporate risk, including risk limits. Usually the next step is to then work with the company to educate personnel on how to best take advantage of market opportunities. Our clients around the northern hemisphere depend on our risk management strategies to help make sound and strategic hedging decisions within a risk controlled environment. We also provide companies quantitative buying & selling programs that can provide historical performance and at the same time take the guess work out of a speculative energy market. Through a combination of these methodologies, we believe our clients will maximize their gross margins while taking the right amount of price risk for respective price environments.
We recognize that different companies have different risk exposures and objectives, so our program will bring tailored programs through our Integrated Risk Management Program (IRMP). With non exchange-traded market for nat gas products, the group's proprietary database and historical knowledge provide our customers a huge competitive advantage. Contact us today.