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Hedging against raw material cost increases

Posted on 1/22/21 at 9:01 am
Posted by mohalk
Member since Feb 2009
371 posts
Posted on 1/22/21 at 9:01 am
Aluminum is the main raw material in my fabrication business and I've seen price increases of around 20% in the past 6 months with more likely on the way.

What's a good way to hedge against this risk by tradiing? I don't want to get into any complicated derivative trading.

I could buy stock in the big producers like Alcoa (AA), Kaiser (KALU) or Arconic (ARNC). It looks like there's also some ETF's available.

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