The operation and profitability of mining, processing, and transporting metals is greatly influenced by price volatility and energy costs. Miners, refiners, and smelters require metals software that can provide real-time data to make decisions regarding metals trading, buying, selling, hedging, and movement.
Metals companies need the ability to manage the complexities of trading concentrates, ores, base metals, steel, and scrap. Efficient metals trading and risk management requires a seamless flow of information from physical contract management to logistics, assay management, pricing, hedging, risk management, invoicing, and associated reporting.
Challenges for the management of metals operations include:
1) Unprecedented Volatility in Commodity Prices
Volatility in commodity markets has become the order of the day. Metals value chain participants such as miners, refiners, smelters, producers, recyclers, processors, fabricators, and traders that manage base metals and concentrates have seen prices fluctuate dramatically. Sudden swings in metals prices impair forecasts, hinder risk management, and negatively impact bottom lines. Slim operating margins and high price volatility leave little room for error.
2) Continually Changing Positions and Exposures
To maximize profits, metals companies need to know their positions and exposures in real-time. As commodity prices change, they need to see exactly how this affects operating margins so they can take appropriate actions for effective metals management. The ability to run real-time scenarios provides a competitive advantage.
3) Complex Supply Chains
It is important that metals companies can accurately track quantities and costs throughout the supply chain. Particularly with concentrates, metals supply chains can be very complex and managing these commodities can be a very manual, error-prone process. Value chain participants that extract, process, and trade metals need an accurate view of their positions and risks at all times to maintain profitability.
4) Accurate Metal Balance
Miners, smelters, and refiners need to maintain an accurate metal balance in all metal forms (concentrates, processed, and finished metal) across business processes. It is critical to these companies that they streamline their operations and eliminate waste. Therefore, it is crucial that an accurate and timely metal balance is determined and reported across the enterprise to ensure that any metal losses are minimized and that exposures to market prices are adequately contained. Learn more at "Top 3 Challenges in Metal Balance Calculations."
5) Assay Management
Metals companies trading in concentrates may struggle to manage the payable metal content. The payable metal content differs for each element and trade. In addition, the payable metal changes throughout the trading lifecycle as different assays are provided by the supplier, such as standard assay, pre-shipment assay, and provisional assay. Each payable element can be priced during different quotation periods.
Melt Away the Challenges
Eka's InSight CM platform is a comprehensive metals trading and risk software solution for managing physical trading, position, P&L, derivatives, risk, logistics, finance, bulk stock, task execution, and business intelligence across base metals, ferro alloys, steel, scrap, and concentrates. The next-generation CTRM software provides real-time data to help miners, refiners, smelters, producers, recyclers, processors, fabricators, and traders make decisions regarding buying, selling, hedging, and moving metals. Mining operations maximize throughput and profitability to gain a competitive advantage when using InSight CM.
