Various metals are traded at a large number of exchanges. Enabling companies to perform metal risk management. The base metals include copper, lead, tin, nickel, zinc and aluminium. In many cases, base metal products are sold with prices indexed to the underlying market.
The KYOS portfolio & risk management system captures your metal inventory, production/consumption figures and the contracted volumes. Combining these physical flows with financial market prices lead to a clear insight in future cashflows.
Multiple category buyers profit from automated commodity market price analytical functions. Each user is able to define a category specific portfolio of commodities. No more use of spreadsheets as all category buyers use the same integrated commodity & risk management system. The Chief Procurement Officer has an up-to-date helicopter overview and compliance and consistency is secured for all categories. You save valuable time by sharing your analysis across the organisation as multiple colleagues can view the results.
Cost savings – KYOS portfolio & risk management system
In the KYOS portfolio & risk management system users are able to compare several commodity price formulas in a split second. Cashflow forecasting becomes an automated proces. Calcutating the best applicable formula takes less time then Excel based analysis. Resulting in significant lower costs with less time spend.
Excel has proven to be a pitfall for many companies in terms of costs, mistakes, hidden risks and potential fraud. ERP systems like SAP look backwards in stead off to the future and cannot perform the required risk management calculations. The KYOS portfolio & risk management system captures years of experience in managing risks of commodity contracts and market price volatility, leading to effective hedging strategies.
Managing cashflow variance – KYOS portfolio & risk management system
The higher and more frequent market prices move up or down the higher its volatility. Volatility is often expressed in a percentage and can be calculated for e.g. interest rates, currencies (FX) and commodities. A highly volatile market price is not per definition a bad situation but you probably feel more comfortable with less volatile costs. Copper has shown an average volatility above 20% in recent 5 years. This is more than double the volatility of EURUSD in the same period. Calculating the volatility should be an integrated part of your metal risk management strategy.
Automated market price analytics are combined with your projected positions. It will provide you with clear insight in the current cashflow and potential cashflow variance versus management expectations. You will have a better insight in project cashflows and the associated risks. Avoidance of unexpected cashflow movements will add value to your organisation.
Fixed or floating prices – Metal risk management
Procurement needs to find a balance between fixed and floating prices. The KYOS portfolio & risk management system will help you to find your “risk and reward” optimum by simulating multiple cashflow variances. It will provide you with clear insight in the potential project cashflows given any variance between fixed and floating prices. Your metal risk management policy will be built on sophisticated calculations combined with your market experience.
Better metal risk management by managing your cashflow variances will lower your required working capital.
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