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Offerings


We help businesses solve the problems created by commodity volatility

TECHNOLOGY | CONSULTING

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Offerings


We help businesses solve the problems created by commodity volatility

TECHNOLOGY | CONSULTING

 
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01 Performance improvement CONSULTING

02 Commodity price predictions TECHNOLOGY

03 Risk position tracking & reporting TECHNOLOGY

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01 Performance improvement

 
 

We’ll help you to improve your approach to managing commodity volatility, so that you make faster and better informed buying and selling decisions.

 
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Whether you are starting from scratch or want to fine tune your existing capabilities, we are the experts in the US and Europe at implementing and running Commodity Price Risk Management in large manufacturers, retailers, FMCG firms, etc.

Commodity markets are volatile and dynamic, continuously peaking and troughing. So managing your exposure to those markets also needs to be continual and dynamic. We'll show you how to navigate these ups and downs, stabilize earnings, reduce costs and, most importantly, enhance profitability.

How do we do this?

We help shine a light on the commodity price risks your company faces, how well you are protected and how you can profit. The risk and the opportunity. By evaluating your current approach, we can show you where improvements can be made and then we’ll work with you to put them in place.

  • We typically work with closely with treasury and sourcing/ trading functions.

  • We identify and quantify the risks you face.

  • We look at your risk appetite and how it’s reflected in your risk and trading activities. 

  • We help develop your price risk management and hedging strategies.

  • We develop and put in place all essential governance and compliance.

  • We review your data and technology requirements.

  • We advise on the skill sets and culture needed to succeed.

  • We look at the commercial terms you have with your suppliers and work with you to develop the right constructs.

  • And, perhaps most importantly, we spend time making sure you and your teams understand the changes needed to ensure your commodity price risk management efforts succeed.

It’s complex - not complicated. And the results are simple:

Lower risk. Lower costs.
Greater certainty. Greater margin.

 

Talk to one of our experts to find out how CPRM can help you to better manage the volatility you face:

 

 

02 nouse.io

Commodity price predictions using A.I.

 
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nouse.io uses artificial intelligence to analyze and make sense of a wealth of data sets, including alternative data. It predicts the future prices of commodities, so that you make better decisions.

 

The problem:

Continuously monitoring the ever growing number of news sources, analyzing the dizzying number of data sets, and deciding which events will impact the future price, is an impossible challenge for any person or team. 

  • Volumes of data: Due to increasing transparency in the markets, the number of data sets available is getting ever larger.

  • Separating the wheat from the chaff: Knowing which data is important, continuous analysis, and making the right inferences is a growing challenge.

  • Human flaws: People often get ingrained ideas about how a market ‘should’ work, and emotions can cloud judgement.

To make matters worse, prices are increasingly volatile - most commodities and raw materials prices swing by 30-60% a year.

For companies that buy many commodities, employing commodity analysts to cover them all can quickly get expensive.

The solution: nouse.io

nouse.io harnesses the power of artificial intelligence on standard and alternative data sets to forecast commodity prices.

  • Predictions are made for future prices in 1 day, 1 week, 1 month, 3 months, 6 months and 1 year time horizons - and they're updated every day

  • nouse.io covers the European, North American and Chinese futures markets

  • The predictions include lower and upper bound numbers. These are 80th percentile confidence bounds - so we would expect the actual values to be inside these limits 80% of the time

Our focus in 2018 is on getting signals set-up for the following. Others can be added if your need is great – get in touch to discuss your needs.

  1. Energy: power, gas, diesel

  2. Agriculture: wheat, corn, cocoa, sugar, cotton

  3. Metals: aluminium, copper, cobalt, nickel

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Enables better decision making

  • Many data sets are analyzed, including alternative ones

  • The 80th percentile confidence bounds mean enables you to see when conviction is strong

  • Machine learning means the analysis continuously improves as each day passes

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Scalable

  • Easy to scale across many commodities

  • Takes a matter of a few seconds to implement

  • Significantly more cost effective than employing multiple analysts across all commodities

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Goes beyond human capability

  • Greater ability to predict, and to do so accurately, than a human can - as well as being faster and more reliable

  • Emotion and other human flaws are removed from the analysis

  • Calculations are run every day, without fail


 

03 AMO

Risk position tracking & reporting

 
 

Our AMO platform provides clients with the governance and compliance necessary to proactively manage price risk, in an automated, secure and simplified manner.

 

The AMO platform is purpose built by price risk experts for the sole purpose of managing the commodity price risk activities of large corporates.

  • AMO monitors the markets and calculates every day your risk positions. If you use VaR, it tracks this too.

  • AMO stores your agreed risk policies and appetite for risk, captures your forecasts and trading activities, and combines all this data with market prices to track, calculate and report performance.

  • It's an independent, auditable, and accurate ‘single source of the truth’, allowing everyone to be on the same page.

  • Traders have the freedom to act in a way that builds trust and encourages high performance.

  • Importantly, traders are separated from the task of managing and reporting on your risk position.

  • It encourages closer working between your treasury and procurement/ sourcing departments. Treasury gets fingertip visibility over activity, and is assured that any activity outside the agreed policies will be immediately alerted to them, enabling the situation to be remedied rapidly.

 
 
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Reduces your risk
AMO tracks your activity and market prices, reports on your fluctuating risk positions, and alerts the business of any price movements or trading activity that mean the agreed risk or trading policies have been breached.
 

Solves the issues of Excel
Compared to Excel the platform is fast, accurately carries out complex calculations, is immutable, deals with and stores large data sets, prevents human error, is accessible on-line, and has the highest levels of security.

Quick and easy to set-up
Compared to 3-6 months needed to implement complex commodity trading systems, AMO takes a few hours to set-up, is intuitive to use, and requires little training. It also comes at a fraction of the cost.

 


* What do we mean by 'Middle Office'?

Risk management best practice is to have a 'middle office' that is separate to your 'front office' traders. Its core purpose is to monitor, quantify and report on the company's price risk.