The Influence of Currency and Price Risks' Hedging on International Companies' Performance in the Metallurgical Sector

The paper analyzes what is an effect of the price and currency risks hedging on the metallurgical companies’ performance, show if this method is efficient and how it can protect companies from unfavorable business results. The hypothesis of this paper is that highly volatile metals and currency markets force metallurgical companies to use hedging instruments in order to mitigate price and currency risks that negatively influence companies’ performance. The hypothesis of the paper was proved – there is a high level of volatility on metals and currency markets, which creates risk of future fluctuations that can have a negative impact on metallurgical companies financials and performance. Such market conditions force metal industry companies to search ways to protect cash flows from unfavorable market movements. Hedging is a tool that is commonly used by these companies and can have a positive impact on companies’ performance, as it was shown in a case study.