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.
Locked In Polypropylene Price for a Year? Yes it exists
BlueClover suggests a more diversified portfolio by introducing a third vertical for “fixed price”. In order to add this third vertical, BlueClover works with its customers to re-allocate a certain portion of contract floating and spot volumes to fixed price.
When polypropylene pricing volatility can be removed from your business, the benefits include potentially enhanced profit margin, accurately forecasting resin spend each month, and freeing up time from working on spot purchases across multiple suppliers each month. BlueClover’s price risk management program is built on decades of experience in physical and financial commodities trading at investment banks and international commodity merchants. Find out if structuring a price risk management program makes sense for your business by contacting BlueClover