Nathan Trotter & Co., Inc. increases capacity in hedging program to help mitigate market Volatility
Nathan Trotter & Co., Inc., a manufacturer of pure tin and solder, announced that it has expanded its metal hedging program with Wells Fargo Bank NA to allow for additional forward sales of metal and solder products to its customers. With metal prices trading at multiyear lows, there has been a growing interest to lock in these prices with blanket orders of one year or more.
While entirely removing the volatility in its material costs, Nathan Trotter’s customers also benefit from the ability to arrange longer term business agreements with their customers at a fixed price. The length of the blanket order is entirely up to the customer, as is the schedule of ship dates. Additionally, Nathan Trotter’s hedging program allows customers to use monthly average pricing to smooth out day-to-day volatility.
Luke Etherington, VP at Nathan Trotter, commented about the hedging program: “Especially with tin being at a six-year low, we are finding that this makes good sense to many of the larger consumers of solder products. While we traditionally saw blanket order terms of up to one year, we have more customers asking for two and even three-year fixed pricing. We successfully worked with Wells Fargo to increase our London Metal Exchange hedging capacity and time horizon so that we can offer these opportunities to our customers. The response has been very positive.”