In response to low commodity prices, increasing financial regulations, and the demands of global metals markets, CTRM software is evolving to meet current and future needs of commodities companies, including miners, refiners, and smelters at metals companies.
Low Commodity Prices
One might assume that in an environment of low commodity prices, the need for CTRM software is decreased. However, it’s not that low prices or high prices themselves drive the need for CTRM software; it’s price volatility and the fact that in today’s commodity markets, commodity prices fluctuate sharply. Today’s markets are tougher than they have ever been. Metals fabricators who use metals to manufacture finished goods are challenged by the price volatility of both metals and the energy used in the production of metals products. The operation and profitability of metals fabricators is greatly influenced by price volatility and energy costs. Fabricators need to protect profit margins and maximize operational efficiency. Eka's next-generation CTRM software provides real-time data to help fabricators gain insight into the source of margin contribution from each process in the lifecycle of the product from origination of raw materials to finished goods.
Volatility in market prices hinders decision making. The explosion of data has only added to the complexity. Analytics has become paramount. To remain competitive in today’s complex and volatile markets, commodities companies need next-generation systems that include management control and decision support to make better, faster, fact-based decisions.
Increasing Financial Regulations
The financial regulations established in recent years have necessitated additional functionality in CTRM software solutions. We can expect these regulations to continue to evolve; likewise, CTRM software will need to continue to evolve to support additional regulations.
Financial regulations have been put in place to prevent market manipulation. These regulations include REMIT (EU), EMIR (EU), and Dodd-Frank (US), and provide for increased transparency of derivatives and other requirements. Regulators are looking for breaches and commodity companies have invested in new processes and systems to ensure they can protect themselves with accurate internal monitoring.
Eka's software enables commodities companies to comply with country specific regulations. The software maintains a complete audit trail of all changes — who, what, when. Reports are automatically submitted to trade repositories. The software ensures commodity market participants can meet regulatory compliance requirements and provide evidence of the proper use of hedging with derivatives.
Eka is committed to enabling our customers to continue to meet federal regulations. As new regulations are created, Eka is updating our next-generation CTRM software platform to support these regulations.
Integrated Solutions
As supply chains expanded and commodities companies became more global, the need for integrated solutions to manage commodities increased. Case in point: Eka’s InSight CM platform is a next-generation system for managing commodity transactions and includes support for all front, middle, and back office functions end-to-end throughout the value chain. The integrated platform provides commonality for back office functions across commodity types and commodity specific modules provide the unique functionality needed to support the physical movement of specific commodities. Supporting a wide range of commodities in the metals, agricultural, manufacturing, and energy industries, the platform provides unique functionality specific to each commodity including base metals, ferro alloys, steel, scrap, mining, biofuels, agriculture, power, fertilizers, oil, coal, and natural gas.
Metals companies use InSight CM to manage physical trading, position, P&L, derivatives, risk, logistics, finance, bulk stock management, task execution, and business intelligence across base metals, ferro alloys, steel, and scrap. The next-generation CTRM software provides real-time data to help miners, refiners, and smelters make decisions regarding buying, selling, hedging, and moving metals. Mining operations maximize throughput to gain a competitive advantage when using InSight CM.
The advanced solution includes all necessary support for the management of raw materials including capacity planning, flexible definitions for treatment charges (TC) and refining charges (RC), flexible pricing, and long term contract writing. The platform gives metals companies the ability to effectively manage contract terms and conditions, pricing, assaying, umpiring, settlements, financial hedges, and P&L. With Eka's software, metals companies can maintain profitability while managing complex physical movements.
What Will the Future Bring?
Commodities markets are characterized by risk, volatility, and complexity, which is driving the need for advanced analytics to make better business decisions. Business users can no longer afford to wait days and weeks to understand market changes, analyze the alternatives, and make decisions. Every business user needs the power to analyze data the way they want.
The need for analytics by commodities companies is the reason behind Eka’s launch of Commodity Analytics Cloud, an advanced analytics solution that brings commodity specific intelligence to all business users. (Learn more in "Eka Launches Commodity Analytics Cloud.") What makes Commodity Analytics Cloud unique is the combination of commodity specific intelligence with a platform built to handle the huge volume of data typical in the commodities markets. The combination of Eka’s next-generation CTRM software platform, InSight CM, and Commodity Analytics Cloud provides the operational and analytical solutions that commodities companies need to manage in today’s complex and volatile markets.
Recent Advances from Eka
Eka's Smart Commodity Management includes Commodity Analytics Cloud, an advanced analytics solution that brings commodity specific analytics to all business users, and InSight CM, a next-generation integrated system for managing commodity transactions end-to-end throughout the value chain. These two solutions provide the analytical and operational solutions that commodities companies need to manage in today’s complex and volatile markets.
Harnessing data from internal systems, such as ETRM, CTRM, ERP, CRM, and spreadsheets, and external sources, such as market curves and weather data, Commodity Analytics Cloud brings all the data together in one place to answer the most important questions. Information is displayed in an easy-to-understand way that facilitates deeper inquiry. Business users can focus on data analysis, not data collection.
Backed by years of deep domain experience, Eka created the Commodity Analytics Cloud platform to deliver apps specifically designed for the commodities markets that address high value business issues. Providing an end-to-end analysis of the entire enterprise, these apps span multiple categories including P&L, procurement, risk, and supply chain. Analytics are no longer restricted to the realm of the IT department or other specialists. Commodity Analytics Cloud opens analytics to everyone.