1。 Get the order, calculate the required material quantity, or determine how many products to be produced in the next few months, and calculate the required material quantity.

2。 According to the amount of materials needed, buy the corresponding copper or steel in the futures market and lock in the cost.

3。 According to production needs, buy spot and sell futures in the same period. Hedging ends and the next cycle begins.

Principle: During the period of 2-3, no matter how raw materials go up or down, your cost is fixed. So in the case of determining the price, your profit is also locked.

Compared with the direct purchase of raw materials in the second step, it has the advantages that:

1。 Save money (profit only)

2。 Reduce inventory.

3。 Save the warehouse

4。 It can be realized at any time. (Order Cancellation)