Luoyang Molybdenum Industry (603993.SH) issued an announcement. The company paid attention to media reports about its trading company IXM...
Zhitong Finance App News, Luoyang Molybdenum Industry (603993.SH) issued an announcement. The company paid attention to media reports about its trading company IXM. The company's response was as follows: It is common practice for international trading companies to hedge market risks through futures in spot trading. The hedging strategy of buying in one market and selling the same amount in another market is also a normal business model for international trading companies.
The wholly-owned subsidiary IXM is a world-class metals trading platform. As an important global commodity trader, it sells the company's products globally, including 100% of the company's own copper products. At the same time, IXM also trades a large number of third-party metals and concentrate products. IXM hedged the metals trade by 100% to reduce price risk in its commercial activities. According to the needs of its global physical trade, IXM uses derivatives contracts from major global metal exchanges to strictly manage commodity price risks. It is not directly related to the realized value of the company's own copper production, and will not affect the sales price of the company's own copper production. IXM does not engage in pure speculative transactions. IXM's trading is a cross-market, cross-term, cross-product hedging and arbitrage trading strategy, and the risk is completely manageable.
IXM has an effective strict risk management and control system. Through risk control models, risk management systems, and approval systems, it can effectively deal with market risks and liquidity risks. IXM's risk management systems are implemented by the IXM Risk Management and Macro Strategy Committee after approval by the company. At the same time, IXM's risk management department will ensure that its risk control policies are strictly complied with during implementation.
Up to now, the company's production and operation conditions are all normal, and overall liquidity is at the best level in history. The company is positive and optimistic about future copper prices. Since the beginning of 2024, it has not carried out strategic hedging business for self-produced copper products. Record copper prices in 2024 and the company's record copper production will also provide strong support for the performance.