S&P Global Platts’ view of the market and ION’s analytical models
Join ION Commodities and S&P Global Platts for a webinar about managing risk in today’s uncertain world.
Webinar: Managing risk in extreme uncertainty and through COVID-19
Thursday, May 14, 2020
ION Commodities, a global leader in advanced commodity analytics, and S&P Global Platts, a leading independent provider of information and benchmark prices for the commodities and energy markets, will co-host this webinar about the impacts of COVID-19 on the oil market and utilizing analytics models to manage risk in today’s uncertain world.
Subject matter experts from both partner firms will discuss how commodity organizations can manage risk and make fact-based decisions during extreme uncertainty. They will cover a wide range of topics, including:
- The unprecedented destruction of demand
- Energy price forecasts for the next couple of months
- When oil prices are expected to recover
- The best analytics models to manage risk in today’s environment
- Expected changes to inventories, refining, infrastructure, and trade flows
- When to use exponentially weighted moving average
- The importance of portfolio stress testing with advanced analytics
- And more
The webinar will include a panel discussion that will answer audience questions.
Global Director of Market Development and Engagement
S&P Global Platts
Michael W. Hinton
Chief Strategy Officer
Don’t miss this free webinar to better understand how to manage risk in an uncertain world.
Register to reserve your spot today.
Webinar: Managing risk in extreme uncertainty and through COVID-19
Thursday, May 14, 2020
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Every year, ION Commodities participates in the Energy Risk Software Survey and Rankings. The survey ranks ETRM and CTRM solutions to recognize companies that have exceeded client expectations in various categories.
Voters Like You Help TriplePoint
Votes like yours help validate ION’s leading position in the market with the most comprehensive collection of commodity trading and risk management software solutions on the market.
Last year alone, ION Commodities won first place in over 20 categories thanks to industry analysts, consultants, and voters like you.
ION Commodities Leads the Market
ION Commodities is proud to lead the commodity management software market with:
- 1,200 customers
- 30,000 users
- 5,750 employees
- 2019 Energy Risk CTRM Software House of the Year, Americas, Europe, and Asia
- 2019 bobsguide Best ETRM/CTRM System
- 2018 World Finance Best CTRM Company
- And more
The Energy Risk survey is open until Friday, Feb. 14, so please make sure you fill it out before then if you intend to vote.
Thank you for taking time to vote, and please let us know if you have any questions.
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- Energy Risk Asia Names ION Commodities As CTRM Software House of the Year, Recognizes ION Allegro
- bobsguide Names ION Openlink Best ETRM/CTRM System for 2019
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- World Finance Names Allegro Best CTRM Company
- ION Commodities Corporate Brochure
Triple Point’s Algosys metal accounting team have been busy in South American recently. Donald Leroux was invited to speak at two prestigious mineral processing conferences: Procemin in Santiago, Chile and ENTMME in Goiânia, Brazil.
Both presentations focused on the need for accurate in-process inventory estimation methods in mineral and metal processing plants. As these inventories can represent a significant amount of money, they need to be estimated as accurately as possible. Algosys metallurgical accounting solution enables organisations to reconcile differences in measurement results, ensuring any changes to in-process inventories are both transparent and auditable.
Managing in-process inventories is just one of the Ten Best Practises of Metallurgical Accounting* as set out by a group of six companies (including BHP Billiton and Anglo American) in the AMIRA P754 code. These guidelines were developed as a response to rigorous corporate governance requirements and turbulent economic conditions. By adhering to the Ten Best Practices and implementing a powerful enterprise metal accounting software solution, organisations can reduce risk, maximise profitability and ensure compliance.
*Ten Best Practises of Metallurgical Accounting
- Straight-Through Processing: Completeness and Integration
- Measurement Accuracy
- Data Redundancy and Validation
- Target Accuracy
- Provisional Data
- In-process inventory
Read more about the Ten Best Practises of Metallurgical Accounting
One month ago, U.S. oil traders weren’t paying much attention to the healthcare debate in Washington. They were more concerned about refinery operations in the Gulf, growing tension with Syria, and hundreds of other factors that would likely affect oil prices. After all, what were the odds that the U.S. government would actually shut down?
On October 1, everyone found out. Non-essential employees were sent home, projects were put on hold indefinitely, and non-mandatory spending was cut off. Suddenly the world’s largest oil consumer needed a lot less oil. Market participants who hadn’t accounted for the possibility of a shutdown, or come up with a contingency plan, found themselves exposed. And even as the shutdown appears likely to come to a close; uncertainty looms large as traders await the release of inventory data.
It is clear that the only way to succeed in today’s oil markets is to rely on new technology. No series of spreadsheets can account for all of the variables that threaten to dissolve margins and eliminate profits. Triple Point’s energy trading and risk management (ETRM) enterprise software, Commodity XL, stands alone in its ability to mitigate risk by providing comprehensive analysis throughout the oil market value chain. Learn more about Commodity XL for Oil.
The Federal Energy Regulatory Commission (FERC) made headlines after it issued a record fine of $453M against Barclays PLC and several of its power traders. FERC stated that the bank manipulated energy prices in California and other western markets between November 2006 and December 2008. The agency is also working towards a similar settlement with J.P. Morgan Chase.
When I read the news, the dollar amount of the fine wasn’t what resonated. The fact that it was issued for manipulation that began over 7 years ago did. FERC doesn’t have to abide by a statute of limitations, and other agencies often use revisions to extend any that do exist. Energy traders are exposed to heightening levels of regulatory risk with every passing day, and FERC may be the least of their concerns.
The introductions of Dodd-Frank, EMIR, MIFID, and REMIT, among others, have elevated complexity in U.S. and E.U. power and gas markets. Rules within each regulation continue to evolve, making it extremely difficult to interpret them. Traders cannot keep up. The task of capturing necessary information and knowing where to send it becomes more convoluted as more parties become involved in each transaction and the number of transactions processed increase. The only effective means to ensure compliance is to partner with an energy trading and risk management (ETRM) provider to implement a regulatory solution.
Triple Point Technology’s ETRM, Commodity XL, has dedicated modules to meet the stringent requirements of Dodd-Frank and regulations in the E.U. Triple Point also employs dedicated experts to remain vigilant in proactively developing and adapting its enterprise software to meet the demands of regulators so your company can focus on making profitable trading decisions. Contact us at [email protected] to learn more.
Ahh, the nicer weather is upon us and summer is finally here. No better time to ice up the beverages and slap some burgers, hot dogs, chicken, and other select meats and vegetables on the grill.
Now that you have this great visual, take a moment to stop and think what it really costs to get an average barbeque together before it hits the grill.
Rapidly rising and volatile commodity prices are causing fluctuations in the cost of the raw materials, packaging, and energy that food and beverage companies must purchase in order to provide the ice cold beer, potato chips, ketchup, and other barbeque staples. When food and beverage companies aren’t properly equipped to manage this volatility, the result is reduced profit margins, and oftentimes higher prices.
For example, the ketchup that is put on hamburgers contains commodities such as tomatoes, sugar, salt, and corn syrup. When the price of wholesale tomatoes more than tripled back in 2011, Heinz cut portions of several key products, including its flagship Heinz 57 sauce, which now comes in a bottle that has shrunk by four ounces, but costs the same as the original, larger bottle.
While passing along increased costs to consumers is a very common practice, there are other options. Companies including Heineken are taking advantage of advanced technology solutions to minimize the impact of commodity volatility on their bottom lines so they don’t have to pass along price increases to the consumer. These solutions, which include Triple Point’s Commodity XL Strategic Planning and Procurement™, provide customers with powerful tools for fully mitigating and managing commodity exposure. Companies that don’t invest in the technologies and processes to properly manage this exposure will lose out on a significant competitive advantage, and risk being left behind.
A sustained boom in natural gas recovery has shifted conversations in the United States from speculation about shortages and price hikes to decisions on how much should be exported. Studies continue to locate proven reserves and natural gas companies are vying for permission to build facilities to create liquefied natural gas (LNG) and export it to non-U.S. customers. Of the 20 federal permit applications that have been submitted to the Energy Department, only two (Cheniere Energy Inc., and Freeport LNG Expansion L.P.) have received approval. However, recent actions and statements made by the Obama administration suggest that more will be approved soon.
Companies given the go ahead will need to determine if the upfront billion dollar cost and time required to build a liquefaction/export facility is worthwhile. In the last few years alone, the U.S. has seen average prices of natural gas range from as little as $2.66 to nearly $8 per MMBtu. While Asia and Europe have seen double digit pricing during that time, it is difficult to predict what will happen as markets gain access to additional supply.
Regionalized natural gas markets are already volatile. Changes in weather, unexpected problems with transport/refining equipment, and political events/policies can all drastically affect supply and demand. The vast amount of LNG set to enter foreign markets will increase uncertainty, and make it harder to navigate risk. Market participants and energy companies must be able to mitigate the risks of trading on a global scale.
Triple Point Technology’s energy trading and risk management (ETRM) software, Commodity XLTM, offers the best path to success. End users can accurately and efficiently monitor physical commodity movements and price changes, and configure a customized dashboard to display trade information and risk positions across transactions and markets. Click here to read more about Commodity XL for Gas.
Over the past decade, Brazil has grown to be the largest economy in Latin America and a major player in global agricultural production. As the world’s largest exporter of sugar, it produces around 20% of the world’s supply annually. In addition, Brazil is a leading exporter of chicken, coffee and soy beans. A significant portion of the world’s economy is dependent on the continued success of agricultural exports, and industry leaders are recognizing the need for advanced commodity trading and risk management (CTRM) solutions that help maintain a competitive advantage by managing volatility and optimizing supply chain efficiency.
In an effort to support the growing need for advanced CTRM solutions in the Brazilian market, Triple Point recently hosted an agriculture-focused Commodity Management lunch in São Paulo. More than 30 regional industry executives from companies including Algar Agro, ADM, BRF Brazil Foods, and Noble Group gathered at the stunning Bar Des Arts for an afternoon of presentations, networking, and fine dining.
Triple Point executives teamed up with Guilherme Nastari of DATAGRO and Eduardo Barros of Accenture to give a complete perspective of current agriculture market trends and Commodity Management best practices. Attendees learned how gaining a transparent, integrated view of physical and financial position in real-time enables them to maximize the impact of volatility on the bottom line. The event was very successful with positive feedback from all who attended.
Visit our Web site to learn how Triple Point solutions can help manage volatility and risk in your business.
Triple Point will join CPOs from Barilla and Chesapeake Packaging on a webinar panel on April 18th, to discuss commodity risk and potential solutions. For more details, click here.
Did you see the recent headline: Samoa Air to price tickets by passenger weight? All fat jokes aside, the underlying logic for the pricing change is so Samoa Air can find the best way to manage jet fuel costs. Each pound shed from a plane saves the company 14,000 gallons of fuel each year. At roughly $3.03 per gallon, that’s $42,400 per year that drops to the bottom line for every one pound reduction.
Analysts have been bifurcated in their opinions of Samoa Air’s new pricing scheme with some thinking it’s a brilliant idea and others that believe it can’t work. I’ll leave it to the pundits to debate the pros and cons of the best way to price airline tickets. But the concept of finding new ways to manage commodity risk is not at all surprising. Managing commodity input costs is the next major challenge for many organizations.
It’s not just airlines that have the daunting task of managing commodity input costs such as fuel. Faced with fundamental changes in the commodities and energy market environment, most manufacturers, including beverage, food, CP, chemical, and industrial, are wrestling with the best approach to protect margins from volatile and rising commodity costs. The risk runs a wide gamut of costs including energy to run plants and distribution fleets, raw materials that are inputs to products, and packaging for finished goods (e.g. aluminum, cardboard). Commodity costs are a major percentage, and the most volatile, of a manufacturer’s spend.
To preserve margins, manufacturers must move quickly to approach commodity procurement differently and more proactively than ever before. While not traditionally viewed as commodity trading organizations, manufacturers can learn from leading commodity trading houses and adopt new processes, tools, and measurements required to optimize raw material acquisition while ensuring compliance with new regulatory demands.
It’s shocking, but I still find many companies that manage commodity risk in spreadsheets. Today’s complex and volatile markets require Procurement to use sophisticated software tools such as Commodity XL™ from Triple Point to not only ensure coverage, stay within budget, and deliver the material when manufacturing needs it, but also to analyze commodity risk and perform scenario analysis. The new benchmark for procurement organizations is how well spend is managed relative to market prices and competitors, not just how well the budget is managed.
As I said, Commodity Management is the next big thing…
European energy markets continue to experience change that will prevent power and gas companies from putting their eggs in the same old baskets. Ongoing developments have exposed the shortcomings of legacy software applications that are no longer capable of effectively calculating risk or optimizing trading activity.
Commodity Now’s latest white paper, Managing the European Energy Equation, written by publisher Guy Isherwood, discusses the adversity that companies have encountered in Europe’s power and gas markets. Uncertainty has made trading in product isolation obsolete, and participants are challenged with managing multiple commodities while struggling to meet the demands of evolving regulations.
Read the full story and learn more about the opportunity that exists in the pan-European market for companies that partner with Triple Point Technology for an energy trading and risk management (ETRM) software solution to navigate newfound volatility and risk.
Triple Point’s Commodity XL™ offers the best path to success in Europe’s power and gas markets. It is an advanced ETRM system that provides real-time physical supply chain management, risk management, and optimization of energy trading strategies for multiple commodities, while capturing the information necessary to meet regulatory requirements.