Horsehead Completes 2008 Hedging Program
12/21/2007 - Horsehead Holding completes implementation of its hedging program for 2008 with the purchase of put options covering 90,000 tons of zinc at a strike price of $1.00 per pound.
Horsehead Holding Corp. has completed implementation of its hedging program for 2008.
Horsehead purchased put options covering 90,000 tons of zinc at a strike price of $1.00 per pound. The 90,000 tons represent approximately 60% of the company’s anticipated zinc production in 2008.
"Our hedging strategy provides the benefit of protecting our cash flow next year during a period of significant capital investment for expansion purposes by locking in a price per pound of at least $1.00," said Jim Hensler, Horsehead's President & CEO. "While we believe the long-term outlook for zinc is favorable, we are pleased to have significantly reduced our risk relative to the price of zinc on the London Metal Exchange in 2008, while still preserving the opportunity to benefit from prices above $1.00 per pound," Hensler added.
Horsehead’s 90,000 tons of put options also approximates the production that will be sourced from EAF dust recycling. The company expects to source its remaining production from zinc-bearing feed materials that are purchased at a discount to the prevailing zinc price—as a result, any price volatility with respect to this production is expected to have significantly less impact on cash flow.
Horsehead Holding Corp. is a leading U.S. producer of specialty zinc and zinc-based products. Headquartered in Monaca, Pa., Horsehead employs over 1000 people and operates six facilities throughout the U.S.
