Norexco seminar covers its scrap paper hedging service

Kongsvinger, Norway-based Norexco ASA is hosting a one-day seminar on Nov. 23, 2017, in Oslo, Norway, to provide details on its scrap paper exchange-traded financial derivatives.

In July 2017, Norexco, which bills itself as “the only dedicated exchange offering services for the pulp and paper industry,” said it would soon begin “listing the most widely traded grade of recovered paper - old corrugated containers (OCC).” Norexco says, subject to regulatory approval, OCC will be listed from the beginning of 2018.

Once the listing is in place, Norexco says it will set closing prices, have tradeable prices on screen and open for block trades. “Ongoing consultations with the industry will determine product structure, indexes, settlement etc. Gaining essential support from major industrial participants will be of crucial importance to make OCC a liquid market,” the group states in a July 2017 news release.

“The international OCC market has historically been volatile,” says Stein Ole Larsen, CEO of Norexco. “In a volatile world with great challenges, we have been welcomed as a stabilizing factor. Our discussions with stakeholders so far indicate support for this listing. We believe that the paper industry should have the same opportunity to manage its price risks on a fully regulated marketplace, as other mature industries.”

The Nov. 23 seminar in Oslo takes place at the Holmenkollen Park Hotel and carries an attendance fee of €300 ($353). Speakers will include representatives from Norexco and other partners in the OCC listing effort.

Topics covered at the one-day event will include:

• what drives commodity risk management toward exchanges and cleared futures;
• risk documentation, risk mandate, trade execution and reporting, including different organizational set-ups in the derivatives sector;
• “walking through a trade” on the Norexco exchange, including factors such as initial and variation margin as well as cash flow;
• hedging: how a paper consumer can lock in a margin by using Norexco futures, including a look at how price exposure is reduced by using derivatives;
• how to understand and segregate commodity and currency risk, via a live demonstration; and
• what kind of market information and analysis is available via the Norexco system.

Those seeking more information or wishing to register can contact Norexco’s Anita Skjong via e-mail at as@norexeco.com, ideally before Nov. 9, 2017.

Norexco bills itself as a regulated commodity exchange specialized for the global pulp and paper industry. It offers trading in cash-settled financial futures, or instruments used to manage price risk for producers and consumers that also present a trading opportunity for commodity trading firms.