Entries for 'Kate Lothian'
September 03, 2012 | Kate Lothian
In less than a decade the price of iron ore has risen tenfold, with China’s economic boom leading the increase in global demand. However, last week iron ore prices hit their lowest level since November 2009; the commodity crashed 4.6%, closing at $94 from a 2012 peak of $149.
With several recent reports of profit slumps, the world’s largest mining companies are starting to struggle in this environment. According to Platts, most market participants remain bearish in their expectations for the iron ore market, with predictions that prices might extend their losing streak until next week and beyond.
Organisations that want to successfully weather this storm will need to transform their supply chains to ensure maximum efficiency throughout their operations. Only by reducing risk to penalties, demurrage and transportation costs and stockpiling where necessary will companies survive. This level of supply chain management can only be achieved successfully with sophisticated mining software solutions like QMASTOR Pit to Port.
July 12, 2012 | Kate Lothian
Since 2010 the coking coal industry, led by BHP Billiton, has been moving towards shorter term market based pricing, breaking with the tradition of annual contacts and mutually agreed prices. This reflects commitment from the industry to achieve current market prices. In April this year, BHP told Reuters that it expected two-thirds of the global coking coal market to adopt spot and short-term pricing mechanisms by the end of 2012. On the back of this, trading platform globalCOAL has recently launched trading contracts for coking coal.
Triple Point has supported this move by adding short-term pricing contracts to their QMASTOR Pit to Port solution. This new functionality has already been adopted at Anglo American; many other clients are set to add it soon.
Pit to Port’s Contract Management module has been enhanced to allow both quarterly and monthly pricing contracts. These changes have been accompanied by additional functionality to report and manage contract information, giving organisations an enhanced understanding of their contracted positions and the ability to make more profitable decisions.
Read more about QMASTOR’s Pit to Port solution.
June 28, 2012 | Kate Lothian
As history has shown us, getting credit risk wrong can result in reputational damage and ultimately financial ruin. Organizations that want to succeed today must make credit an enterprise level concern.
I recently talked to Fred Pacione, Director of Credit Risk and Marketing Treasury at Nexen Inc. about how they manage credit risk and the central role that Triple Point plays in this. Nexen takes an automated approach which crucially has the full support of senior management. Their credit risk strategy has four key elements:
- Holistic counterparty assessment
- Accurate view of exposure
- Credit risk prevention measures
- Credit risk reporting
A credit risk strategy must deliver these four elements and have the backing of management. Anything less could be perceived by shareholders as irresponsible. In short, organizations must abandon their spreadsheets and rudimentary systems and put in place a sophisticated, automated credit risk system. To learn more read the full article.
June 19, 2012 | Kate Lothian
Are you looking for greater visibility into your supply chain? Do you dream of a "single version of the truth" across mining operations, marketing, logistics, and finance, but are not sure how to make it a reality?
Triple Point recently hosted a webinar with Exxaro’s Melanie Steyn on how they gained a single view of mining operations, saved money and increased productivity with QMASTOR’s mining supply chain solution. Triple Point experts also provided deep insight into how to simplify logistics, meet targets and optimize production.
The webinar highlighted valuable tips on how to reduce penalties and operational risk while making supply chains more productive and improving efficiency. Key takeaways included:
- How to improve quality and grade control while containing costs
- Tips on optimizing resource allocation and strengthening internal controls
- Why supply chain visibility is essential to gain an up-to-the-minute view of commercial position
- How to track and forecast bulk commodity movements and stockpiling
- Why it is NOT an Excel world anymore
If you missed the live event, don’t worry – you can view the webinar on-demand here.
You can also read an interview with Exxaro about their implementation of QMASTOR’s Pit to Port solution and the benefits it has brought them.
June 01, 2012 | Kate Lothian
Steve Maxwell recently presented at Dry Cargo’s Bulk Ports, Terminals and Logistics 2012 Conference in Amsterdam. It was a lively and interactive session that demonstrated how organizations can optimize decision making and deliver substantial cost savings by integrating terminal operations on a common technology platform.
With numerous partners and resources the bulk terminal supply chain is very complex. Consumers, suppliers, vessel owners/charterers and agents, maintenance planners and transportation providers all need to record and exchange large amounts of data while managing their unique business processes. Despite these challenges, many terminal organizations are still attempting to manage their supply chain with inadequate spreadsheets that cause process inefficiencies, errors, and poor decision making that lead to lost profits and operational risk.
The only way to fully mitigate these risks is to implement integrated terminal management systems which bring together information systems, business processes and people to provide end-to-end visibility into operations. Once up and running, key benefits of such systems include:
- Resource optimization
- Increased terminal throughput
- Reduced demurrage and transportation penalties
- Commodity quality management
- Visibility through real time accurate information
- Improved information workflow and stakeholder self service
- Reduced operational security and compliance risk
- One version of the truth across the supply chain
Integrated bulk terminal management is rapidly beng adopted by the industry as best practice. In Accenture’s report on Transformation to Enable High Performance in Ports they stated, “In this battle for a growing but increasingly demanding market, the winners will be ports that can manage terminal performance holistically.”
Triple Point’s QMASTOR PortVu solution is an award integrated bulk terminal management system that is being used by organizations such as Dalrymple Bay Coal Terminal, Newcastle Coal Infrastructure Group and Westshore. The solution manages the complexities of stockyards, inter-modal transportation, and vessels while ensuring equipment is scheduled and utilized efficiently. PortVu integrates terminal operations with suppliers, customers, transport providers, agents, laboratories, and other partners through the use of a common platform.
Read more about Triple Point’s QMASTOR PortVu solution.
May 22, 2012 | Kate Lothian
We hosted our Global User Conference last week in Barcelona. Situated in the stunning Hotel Arts, we had users attending from across Europe, Africa, North and South America and Asia. It was a really successful two days packed with interactive product sessions, customer case studies and some great networking and hospitality.
As part of Triple Point’s ongoing commitment to be the best solution partner, users were given the opportunity to influence product roadmaps in the Customer Driven Development meetings. We also had some great tips and tricks sessions to help users gain a greater return on their investment in Triple Point solutions. Additionally, we showcased our new mobile apps during an exciting live demonstration.
We would like to thank all the users who attended and also the 9 Partners who kindly sponsored the event. Focal Point 2012 sponsors were Structure Group, DataGenic, Deloitte, FEA, Lacima, Morningstar, Opportune, Softcom Solutions and ZE PowerGroup.
We look forward to the next Focal Point!
April 13, 2012 | Kate Lothian
I recently talked to Exxaro, South Africa’s second largest coal producer, about the challenges affecting the industry today and how they are transforming their business to meet the growing global demand for coal. A major part of their transformation has been to reengineer the supply chain so that they can produce substantially more coal and generate more revenue.
During our conversation, Melanie Steyn, Exxaro’s Coal Export Manager offered some fascinating insight into the risks posed by manual supply chains. Using spreadsheets to manage complex supply chains can result in inefficient production, financial penalties, high transportation costs and demurrage.
Melanie goes on to talk about their implementation of QMASTOR’s Pit to Port solution and the benefits it has brought Exxaro which include increased productivity, significantly reduced costs and a centralized view across all mines, stockpiles and terminals. Additionally, QMASTOR’s seamless integration with SAP EEC6 has enhanced efficiency throughout the supply chain.
You can read the interview here. I hope you find it useful and gain some tips on how to improve your supply chain.
March 23, 2012 | Kate Lothian
The South African coal industry received a huge boost last month when President Jacob Zuma used his State of the Union address to back critical infrastructure projects in South Africa. He announced a much needed investment of R200bn ($26bn) to help upgrade the capacity of the state owned rail network, Transnet, which currently limits the amount of coal South Africa is able to export.
Transnet is crucial to the future of the South African coal industry. Today, the volume that the rail network can carry is below the export capacity of their largest coal terminal (Richards Bay). Transnet have started upgrading the network which has brought improvements but also some temporary fluctuations in capacity. This boost from President Zuma could not have come at a better time.
South Africa is the world’s fifth largest coal exporting country. Once complete, the upgrades in the rail network will mean that they can export the entire 91m ton capacity of the Richards Bay Coal Terminal. The industry is already starting to plan how they can expand their export capacity to at least 100 million tons.
Exxaro, South Africa’s second largest coal producer uses Triple Point’s QMASTOR supply chain management systems to manage the tonnage, quality and value of coal and minerals from their mines to the point of export, import or consumption.
November 23, 2011 | Kate Lothian
Research and consultancy firm, Finadium, published an interesting report last week on the challenges that new regulations (MiFID and Dodd-Frank) are set to bring collateral management for OTC trading. The report highlights how dramatic the changes are going to be, and according to the market participants they interviewed, how technology is the only viable solution to effectively manage collateral in a post regulation world.
MiFID and Dodd-Frank central clearing mandates are going to change OTC trading forever. The increase in cash collateral requirements and daily margin calls will have a large impact. According to a recent Bloomberg article the cost of central clearing could setback Europe’s electricity market by up to $93bn.
While decreasing counterparty credit risk, central clearing will bring huge operational risk. Daily margin calls will make position and liquidity management impossible on a manual basis. Additionally, firms with non-standard trades that cannot be centrally cleared, or who are exempt from clearing, need to manage a ‘mixed’ collateral environment which only adds to the complexity and need for automation.
Effective collateral management needs to become a key feature in pre-trade decision making, where costs of collateral may affect where, whether and how to engage in a trade. So, not only is effective collateral management required from an operational point of view but it will be vital to drive the best trading decisions.
In its conclusion the report highlights that the majority of participants have started to look for collateral management solutions now, rather than wait until the regulations have taken effect. Have you started to think about this? With changes this far reaching can you afford not to?
The full report can be downloaded from here: www.omgeo.com/reportswhitepapers
September 16, 2011 | Kate Lothian
The global financial crisis has sparked a rethinking of the reporting of fair value disclosures and given rise to concern about counterparty credit risk inherent in derivative portfolios. The credit position of an organization and their counterparties is critical to the transparent valuation of earnings and compliance with changing regulatory requirements.
With auditors, shareholders and regulators insisting on transparency, verifiability and validity of accounting figures, getting the credit haircut or credit value adjustment (CVA) wrong, or excluding it from earnings statements, will raise serious concerns. Organizations cannot afford to ignore this issue, doing so risks the reputation of the firm and the confidence of stakeholders which could ultimately lead to potential business failure.
Triple Point has been helping companies optimize, value and manage their derivative portfolios for over 18 years. By taking into consideration counterparty risk, we enable organizations to provide consistent fair value measurements and disclosures which give all stakeholders confidence in the valuations of assets and liabilities.
Below is a list of 4 ‘must-have’ features that will enable organizations to make accurate credit value adjustments in their fair value disclosures:
- 360 View of all Counterparties - A single, automated view of each counterparty, showing the asset and liability position which indicates the basis for the credit adjustment.
- Collateral Management - Ability to analyse all collateral within master netting agreements, ensuring a contractually accurate view of exposure and liquidity obligations.
- Credit Rating Assessment - Assessing the credit rating of the counterparty or your internal rating in conjunction with the maturity of each transaction will determine the credit adjustment, typically based on credit default swap (CDS) rates to the valuation.
- Transparent Accounting for CVA - Separate accounting entries for each CVA, showing the methodology for each credit adjusted Mark-to-Market
All of the above functionality is available within Triple Point’s Commodity XL for Fair Value Disclosure, a Software Assisted Compliance (SAC) solution which ensures organizations are able to optimize their portfolios, disclose accurate valuations, comply with regulations (IFRS 7, ASC 820) and maintain stakeholder confidence. Counterparty credit risk should also be considered when applying hedge accounting and calculating hedge effectiveness. If you would like to learn more click here.