Managing energy price risk for the pulp and paper industry

摘要

The pulp and paper industry is an energy-intensive manufacturing business. With declining output prices, it has become increasingly important for firms to minimize and or fix the variable components of their production costs. Energy costs occupy a significant portion of the cost-of-goods-sold for paper firms. A number of opportunities exist for paper companies to hedge their exposure to unpredictable swings in energy prices. The folowing reviews the methods for implementing an effective hedging program, and the potential opportunities arising from the changing North Americal supply and demand picture.