For most polypropylene convertors, their procurement strategy is divided between two primary verticals: contract floating price and spot volume. The percentage breakdown of each varies by customer and market type, but both are susceptible to significant price swings in the market.
BlueClover suggests a more diversified portfolio by introducing a third vertical for “fixed price.”
When polypropylene pricing volatility can be removed from your business, the benefits include potentially enhanced profit margin, accurately forecasting resin cost each month and freeing up time from working on spot purchases across multiple suppliers each month.
In addition, customers who lock into fixed price strips at regular intervals will reasonably match the market in yearlong evaluations. BlueClover’s price risk management program is built on decades of experience in physical and financial commodities trading and reselling from producers, investment banking and commodity merchants.
Find out if structuring a price risk management program makes sense for your business by contacting BlueClover. Also, if you missed our webinar and would like to download it please click here.
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