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Zinc Aluminum Copper Steel China

Zinc Aluminum Copper Steel China. EMERSON COMMODITY HEDGING LIMITATIONS. Limit direct material hedging to 14 months (vs. two years currently). Should allow time to adjust pricing as necessary. Continue to follow the band strategy for direct material hedges:

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Zinc Aluminum Copper Steel China

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  1. Zinc • Aluminum • Copper • Steel • China

  2. EMERSON COMMODITY HEDGING LIMITATIONS • Limit direct material hedging to 14 months (vs. two years currently). • Should allow time to adjust pricing as necessary. • Continue to follow the band strategy for direct material hedges: • Hedge 20 – 90% of exposures for up to 14 months. • Hedging range driven by timing of next expected price increase and the risk of price rollbacks if commodity prices fall. • Exposure related to annual price agreement can be hedged at time of agreement. Direct Material

  3. EGS Hedging Standard

  4. Zinc Market LME Price Curve • LME 3 Month Buy 7/28 at $0.83 / lb

  5. Aluminum Market LME Price Curve • LME 7/28 3 mo buy at $1.35 / lb

  6. Copper Market LME Price Curve • 3 Month Copper LME price 7/28 at $3.62/ll

  7. Yearly Market Price Fin Rev Current Market Market Delta Zinc 1.48 0.83 (.65) CU 3.40 3.62 .22 AL1 1.21 1.35 .14 AL2 0.98 1.18 .20

  8. Current Zinc Hedge Positions

  9. Current Primary Aluminum Hedge Positions

  10. Current Copper Hedge Positions

  11. Current Secondary Aluminum Hedge Positions

  12. FY08 Metal Hedges

  13. FY09 Metal Hedges

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