Misaligned contracts
Your purchase contract references one quotation period, while your sales contract references another, often with a fixed price. You pay the difference with every fluctuation, in either direction.
CONSULTING FOR THE ALUMINIUM INDUSTRY
Absorb aluminium market shocks with decisions made ahead of time
I help industrial buyers of semi-finished aluminium products control their LME price exposure and protect their margins.
A discovery call, no commitment.
THE SUBJECT
Where the margin goes
The price you pay for a semi-finished aluminum product is a composite: it comprises an LME quote, a regional premium, and a processing spread, as well as a quotation period and an indexation clause. Each component fluctuates at its own pace. Your selling prices, meanwhile, are subject to different constraints, such as annual tarif or project specific pricing. And when purchasing and sales do not follow the same rules, your margins are inevitably affected.
Hedging decisions lack a written framework
Positions are taken on a case-by-case basis, without a mandate, thresholds, or a record of decisions. When the decision maker leaves, the expertise leaves with them.
The "all-in" price doesn't tell the whole story
Base price, regional premium, processing, transport, energy, carbon. Two supplier quotes from the same day cannot be compared if they are based on different criteria.
Recycled content is required but not quantified
A recycled content rate requested by customers or mandated by regulations affects material availability, premium levels, and even the choice of supplier. These three factors can be anticipated.
MAIN OFFER
LME price hedging
The goal is not to forecast LME prices. No one does that reliably and I make no such claim. The goal is to make your exposure measurable, decide what portion to hedge, and establish a system capable of managing that decision over time.
I work with finance, purchasing and executive management teams, on your contracts, your volumes and your timeframes. Not on a generic model.
What you receive:
- 01A map of your net exposure, month by month, in both tonnes and euros and an analysis of how your margin react to a €100/tonne price fluctuation
- 02Recommendations for aligning your supplier contracts (quotation periods, indices, currencies) prior to using any financial instruments
- 03Two or three quantified hedging scenarios (best-case and worst-case), including their impact on cash flow (margin calls and security deposits)
- 04A hedging mandate and associated policy signed by Executive Management, Finance, and Procurement, along with an accounting framework agreed upon with your CFO and statutory auditor
- 05Broker selection, contract review, execution procedures, and an initial pilot transaction with reduced tonnage
- 06A management dashboard, a monthly review process, and a written protocol for interpreting performance results
OTHER WORK
Two adjacent subjects
The all-in price
Break down your costs line by line: LME price, regional premium, spread, logistics, energy, and carbon. This allows you to compare offers that are not otherwise directly comparable and to distinguish the negotiable portion of your price from the non-negotiable portion.
Recycled content
Translate recycled content requirements into quantifiable impacts: material availability, premium differentials, effects on the declared carbon footprint, and appropriate indexation formulas. The data used comes from your suppliers' environmental declarations or, failing that, from official European Aluminium Association datasets.
METHOD
How an assignment runs
- 01
Framing
Scope, deadlines, and the decision expected at the end of the assignment.
- 02
Diagnosis
Interviews with the functions concerned, collection of contracts and volumes, mapping of net exposure.
- 03
Decision
Costed scenarios, cash sustainability test, choice made by your executive committee.
- 04
Implementation and handover
Mandate, runbook, pilot trade, dashboard, training of your teams.
Every assignment is billed as a fixed fee. You know the content and the amount before we start. No daily rates, no duration drift.
OPEN ACCESS
Measure what price does to your margin
An online tool that calculates what an LME move does to your margin, from your volumes and your maturities. It applies the method I use on assignments: breakdown by sub-period, margin at risk thresholds, readings in euros and in EBITDA points. Nothing to install, just a click on a link.
Open the toolWORK DELIVERED
Assignments delivered
- Sector
- Aluminium industry
- Customer
- Aluminium Dunkerque
- Subject
- How to decarbonize your product offering through recycling and meet customer expectations
WHO I AM
Xavier Delevacque
I spent 17 years in the aluminium industry, in production, in sales and on the executive committee of a major player in the sector. I bought and sold LME indexed aluminium, negotiated contracts, and managed price exposure in tight market conditions.
I founded DiXiD to put that experience to work for the industrial companies that transform or buy aluminium. My target: European companies consuming semi-finished aluminium products (extrusions, sheet, castings) from 250 tonnes a year, in construction, transport, solar, electrical products, stockholding and general engineering.
What I deliver comes down to one line: the system and the information needed to decide.
GET IN TOUCH
A discovery call
Thirty minutes to understand your situation and tell you how I can help you. If I cannot, I say so before the call ends.
Pick a slot
Send a message