Choosing the right contract length depends on your business’s risk tolerance and market expectations. Shorter contracts (for example 6–12 months) allow you to renew frequently and potentially capture lower rates when market prices fall, but they also expose you to price volatility. Longer contracts (two to five years) lock in a fixed rate and provide budget stability for planning purposes, yet may cost more if rates decline during the term. Evaluate your consumption profile, price trends and cash flow needs to select a term that balances certainty and flexibility.
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