Risk Monitoring & Management Trends in Commodities

Risk Monitoring & Management Trends in Commodities

Login to Download

Commodity producers, traders, and industrial consumers are all facing a barrage of risks such as price exposure and cyber vulnerability, as well as legal, credit, operational and market risks. The risks associated with buying, selling, and moving commodities only seem to be increasing exponentially with greater regulatory oversight and a broadening of supply chain operational issues like traceability. Many of these risks can be business killers – the actions of rogue traders or the impact of counterparty business failures, for example – and lead to fatal damage such as an inability to access capital or damage to brands (via issues around sourcing commodities or producing substandard end-products). Other risks, such as ineffective price risk management, inefficient scheduling of transportation, or regulatory non-compliance can erode profitability and damage the company’s ability to execute on strategic plans and growth initiatives.

Of course, often where there is risk, there is also an opportunity to profit - but only when those risks are recognized, effectively managed, and properly mitigated. The rise in stakeholder scrutiny and regulatory oversight also means that being able to demonstrate effective risk management across the organization is certainly more important today than ever before.

Commodity Technology Advisory LLC (ComTech), with the support of study sponsor Allegro Development Corp., undertook a snapshot survey of the industry to find out more about the types of risks faced by trading companies and to gain an indication of how and where those risks were being managed.

Latest Publications

Capcos Energy Practice post-FIS – A Conversation with the Leadership Team

Login to Download

FIS announced their intention to spin-off the company’s Capco consulting business in May of this year. With the transaction completed in August, we recently visited with leadership team of Capco’s Energy Solutions group to gain insights into what a newly independent Capco means for their energy clients, and get their thoughts on a couple of current and pressing industry trends.

ComTech Advisory: With the recent announcement that FIS has sold a majority interest in Capco to a fund managed by Clayton, Dubilier & Rice (CD&R), Capco is now an independent company. Can you tell us about what impacts this transaction will have on your practice area, Capco Energy Solutions, and what changes, if any, your customers will notice?

Lance McAnelly: We are excited about this recent milestone in Capco Energy Solutions’ journey as we transition into being a growth minded, independent entity exclusively focused on providing consulting services. This enables us to continue our independent, objective, industry leading services to our clients without any confusion as to our focus.

Commodity Markets – A Headhunter’s View

Login to Download

ComTechAdvisory: Given all of the turmoil in commodity markets this last year or so, how has the job market been impacted?

James Richmond: The markets have been slow in the past year in the prime locations (London and Geneva in particular). There has been a lot of divestment in the oil majors and energy utilities as well as in the more asset based areas of the multi-commodity traders. I have noticed a lot of growth in the outsourcing market. Whilst the UK and Switzerland has been quieter than usual, most firms tend to hire more globally dispersed teams, which comes with the added benefit of cost savings / staffing arbitrage. In the last 6 months, we have been involved in staffing projects into the Netherlands, Germany, Portugal, Estonia, Stamford, Singapore and the Czech Republic. Two years ago, it was mostly Switzerland and the UK.

Improving Data Aggregation and Analysis to Address Challenges of an Evolving Energy Market

Improving Data Aggregation and Analysis to Address Challenges of an Evolving Energy Market

Login to Download

The North American energy markets, influenced by both domestic and international developments, are undergoing a rapid evolution that has and continues to challenge energy commodity producers, processors, and traders. Driven by technical innovation, regulatory intervention and globalization, the changes occurring have impacted the entirety of the energy supply chain - establishing new pricing correlations, increasing operational complexities and creating new markets and trading hubs…and, by extension, created vast new pools of data and information that must be considered when formulating market strategies and trading decisions.

Despite these challenges, for those properly equipped with the tools and applications that can capture, analyze and support real-time decision making, there are any number of new opportunities to profit in this complex environment.

In this white paper we will examine the ongoing changes and the resultant challenges in a few of the most rapidly evolving North American energy markets, and discuss an approach to address those challenges through sophisticated real-time data aggregation and analytics.

2016 – 2021 CTRM Market Outlook

Login to Download Purchase Full Version

Commodity Technology Advisory LLC (ComTech), the leading analyst firm covering commodity trading and risk management (CTRM) technology markets, has recently completed its biannual in-depth review of the CTRM software market space in order to compile an estimate of the size of the global CTRM technology market and prepare an outlook for growth across the various component submarkets that comprise it.

Readers of this report should be aware that in the development of this data, as in past years, we must delineate boundaries for the companies and applications reflected in the scope of the analysis.

Purchase the full version 2016 – 2021 CTRM Market Outlook