MetalMiner

MetalMiner (and our parent organization, Azul Partners) has been quietly building up a cool business the past few years. The only thing increasing faster at the moment than our revenue and cross-site traffic — we’re currently up to nearly 100,000 unique visitors and over 300,000 visits per month across our four sites — is the quantity of thought leadership we’ve been publishing both in blog and research paper formats.

Yet we haven’t always focused so heavily on publishing.

Before MetalMiner became a preeminent site in the metals and supply chain market, the founders ran a successful consultancy focused on metals cost reduction for manufacturers. The blog, in fact, was originally just a ploy to position the firm’s expertise and services (my, how a few years can change everything!).

But as MetalMiner grew to such a level where not pursuing publishing as the full-time focus would have denied the chance to carve out a high-growth niche in the market for information and insight, the original team scaled back on our metals advisory work.

Now, with a greatly expanded organization with additional team members and a broader portfolio of sites and talent to draw on, MetalMiner and our sister site Spend Matters are once again providing highly specialized knowledge and services to clients through a new advisory firm: Spend Matters Group.

Spend Matters Group is taking a targeted role across the broader sites, serving as an advisory firm focused entirely on serving specialized needs, delivering services both direct to manufacturers as well as through third-party firms (e.g., consultancies) looking to uniquely advise their clients.

When it comes to metals specifically, Spend Matters Group (with MetalMiner resources) can identify and implement cost savings or cost avoidance strategies that the great majority of practitioners have not even heard of before. And we can do it in categories that others won’t touch (e.g., heat treat services or electro-plating). Our engagement model leverages proprietary MetalMiner IndX℠ pricing data and forecasting models and a general metals procurement bag of tricks that simply does not exist elsewhere in the market.

Our metals advisory expertise for global manufacturers spans the following raw metals and metal component categories:

•    Aluminum, Copper, Nickel, Steel, Stainless, Titanium, Rare Earths

•    Primary metal, ingots, sows, billets

•    Semis, sheet/plate, extrusions in all forms, including pipes and tubes

•    Fittings, flanges, anodized sections, painted sections, painted sheet/coil

•    Semi-finished special sections for the defense industry

•    Plain and printed foil

Our metals component strategy and cost reduction expertise includes: castings, fasteners, bushings, levers, shafts, fabricated parts, forgings, machined parts, mattress innersprings, sheet metal, stampings and forged and machined blocks for molding and general engineering applications.

Whether formulating a range of sourcing and category management approaches (e.g., global sourcing, mill-direct, distributor, multi-tier supply chain sourcing, demand aggregation strategies, etc.) or developing statistical modeling/forecasting and hedging approaches across metals spend, MetalMiner’s advisory services can bring a laser-focused approach to metals category insight.

We also can help with developing conflict minerals (Dodd-Frank) traceability programs as well implementing metals rebate programs, index-based bidding strategies, VMI initiatives, consignment schedules and total landed cost models – including the skills processes and technologies that make it all possible.

Spend Matters Group (and MetalMiner) work with the entire metals value chain, from producers to manufacturers — and everyone in between. Whether you’re a consultancy looking for subject matter expertise as part of a client engagement (or to develop internal skills/competencies), or a manufacturer, distributor or producer looking to leverage the services of Spend Matters Group and MetalMiner directly, we look forward to hearing about your challenges, opportunities, and ways we might be able to help.

Learn more here.

Hedging Strategies for Commodities

We all know what it’s like to hear the word “hedging” thrown around — but do we know what it means for our sourcing organizations?

Damon Pavlatos and Tom Hronis from Future Path Trading break it all down for manufacturers, and what it really means to effectively hedge your commodity spend. The good news: “You don’t need 10 or 15 million dollars to get involved in the futures market,” according to Hronis.

As my colleague (and Big Kahuna over at Spend Matters) Jason Busch put it in his dispatch:

“One of the benefits (and challenges) associated with hedging using the futures markets…is that procurement organizations must get their head into a mindset in which not everyone in the market wants to actually take physical delivery of a commodity. Which is why, in part, there is so much potential leverage one can have over a futures contract (i.e., low dollar amounts can theoretically control large volumes of materials/commodities for future delivery).

For example, for a 25,000-pound contract for “High Grade Copper” if the current price per pound is $3.87, hedgers, with only a $5K performance bond, can control the entire contract worth $96,750.

However, as Tom and Damon caution, if you’re on the wrong side of the agreement and the price falls, you are responsible for any margin calls and new margin requirements generated. And on the other side of the coin, the counter position would be as “the price rises, you also are responsible for any margin calls and new margin requirements generated.” In other words, small dollar amounts can control very significant future obligations in the futures markets. But as such, spend can be “locked” with relative ease, provided companies maintain enough margin on reserve to cover the future obligation and the moving price targets in the meantime.

Unlike futures contracts that come with an obligation to take delivery (i.e., you’re buying or selling “it” at settlement based on the underlying contract terms), call options provide the “option to buy something by a certain time at a certain price by a certain date” and represent a “a cheaper alternative in lieu of a full blown futures contract” and can also be “used to provide upside protection for short positions.” For procurement organizations, a short position could simply be an un-hedged demand.”

Advanced Sourcing Technologies

Several stars in the sourcing technologies world — Jim Wetekamp of BravoSolution, Sean Timmins of Triple Point Technology, and Trevor Stansbury of Supply Dynamics — took the stage at our second session, Advanced Sourcing Technologies.

One of the speakers, Trevor Stansbury, has a close hand on the metals world, as his primary focus is material demand aggregation. “Companies don’t just compete with companies anymore — now supply chains compete against supply chains,” he said. In order to provide visibility across supply chains, Trevor maintains that you need a very “robust platform to connect the dots between the players.” When asked how demand aggregation helps, Trevor stressed that standardization (just one of many important facets) is key.

For example, when collecting the data across suppliers, you get to see that they’re not matching up the types or forms of products they need with the mills that produce those exact specifications (e.g. targeting and buying from mills that specialize in producing plate, rather than a more specific shape). “Harnessing the information to do very simple things that don’t require much engineering change or large investment” is the goal, Trevor said.

Forecasting, Statistical Modeling, and Building Internal Competencies

You may already be familiar with Omer Abdullah’s leading-edge work with The Smart Cube, Inc. — watch a video interview with Omer here and here — but Commodity EDGE attendees got an hour-long session featuring Omer’s winning persona (not to mention killer insights).

Omer’s mantra comes down to this: you must understand the fundamentals of a commodity’s manufacturing process, from inputs to end uses, to be able to build forecasting models. After you understand fundamentals, make sure you check essential steps off your list in forecasting accurately — including, but not limited to, building in evaluations for alternative scenarios, continually refreshing and evaluating your model to keep it dynamic, and understanding your hedging options (natural, physical or financial hedging).

And that brings us full circle. Themes weaving through the three sessions became apparent — one, namely, standing out above the rest: volatility, and, indeed, uncertainty, is the New Normal.

Registration begins now for Commodity EDGE: Sourcing Intelligence for the New Normal at the InterContinental Chicago (O’Hare).

(If you’re attending, we’re excited to have you! If you’re sick of hearing about Commodity EDGE, you won’t be for much longer!)

*Keep checking in with MetalMiner and Spend Matters to read and see the latest on the conference sessions.

We look forward to seeing you.

–The Editors

MetalMiner Turns 4 Tomorrow!

by Taras Berezowsky on
Style:
Category:
Humor

Many thanks to all our readers, sponsors and contributors over the last four years!

–The MetalMiner Team

Here’s the second episode of MetalMiner Sourcing Outlook, brought to you by Zycus.

In each episode of this web-only show, MetalMiner Editor Lisa Reisman brings you a concise yet comprehensive outlook on the commodities and metals markets, as well as an exclusive one-on-one interview with personalities working within the commodities sphere.

The episode is viewable here on the blog (look for this episode and future ones on the left side of the MetalMiner home page as we release them) and on MetalMiner’s YouTube channel. Be sure to subscribe to MetalMiner’s YouTube channel if you haven’t already!

The goals of the MetalMiner Sourcing Outlook series include:

  • Providing the viewer with valuable, actionable sourcing commentary in an interesting format that will give him a leg up in his role as a sourcing professional, investor, analyst or simply well-informed individual
  • Delivering a diverse range of segments, touching on metals, energy, international trade, and macroeconomic policy
  • Doing all the above while remaining accessible and not taking ourselves too seriously

Enjoy, and check back in for the next episode!

Welcome to the inaugural edition of MetalMiner Sourcing Outlook, brought to you by Zycus.

In each episode of this web-only show, MetalMiner Editor Lisa Reisman brings you a concise yet comprehensive outlook on the commodities and metals markets, as well as an exclusive one-on-one interview with personalities working within the commodities sphere. Once the show schedule truly gets rolling, MetalMiner and Zycus endeavor to bring you an episode of MetalMiner Sourcing Outlook once a month.

The current iteration was produced in mid-August, and we’re just releasing it today, here on the blog and on MetalMiner’s YouTube channel.

The goals of the MetalMiner Sourcing Outlook series include:

  • Providing the viewer with valuable, actionable sourcing commentary in an interesting format that will give him a leg up in his role as a sourcing professional, investor, analyst or simply well-informed individual
  • Delivering a diverse range of segments, touching on metals, energy, international trade, and government and economic policy
  • Doing all the above with a dynamic, engaging presentation while remaining accessible and not taking ourselves too seriously

Be sure to keep an eye out for future episodes on the MetalMiner home page, where we will update them as they become available.

Enjoy, and check back in for the next episode!

MetalMiner Editor Lisa Reisman speaks with Jennifer Diggins, director of public affairs at Nucor, about how the company views, uses and relies on its relationship to natural gas.

Hopefully you’ve gleaned some valuable insight into how Nucor Steel perceives the current policy landscape as it pertains to manufacturing. As we trundle along toward Labor Day, and as companies gear up for the fall, the importance of retaining and creating manufacturing jobs in the US cannot be overstated. As reshoring gains steam and the government flails to get the economy back on track, US manufacturing policy should be a primary focus.

Previous segments of MetalMiner Editor Lisa Reisman’s discussion with Jennifer Diggins of Nucor covered Washington gridlock over the debt ceiling and other congressional shortcomings; EPA emissions regulations; long-term US energy and manufacturing policy; and ethanol subsidies and the role of government.

Look for more content from MetalMiner and Nucor in the coming months.

Disclaimer: Nucor is a sponsor of MetalMiner.

As crude oil reached the top of the rollercoaster in the spring with record prices, and continues to make waves in the commodities markets, activity in the alternative fuel sector has reached a critical point — we’re now at a place and time that calls for definitive energy policy, especially domestically.

With that, we kick off MetalMiner’s Best of Summer Series with Oil, Gas and Energy Policy. Here are some of the best-read and/or most incisive posts on those topics. Enjoy!

1. Shale Oil Could Be US Answer To Reliance On The Middle East

2. Natural Gas Price Outlook What’s the Play?

3. Solar Power: The Clouds Gather

MetalMiner was able to spend some time at Nucor’s headquarters and had an insightful conversation with Jennifer Diggins, director of public affairs at Nucor. Here’s what MetalMiner Editor Lisa Reisman discussed with Diggins on ethanol subsidies and long-term US energy policy:

Nucor on ethanol subsidies.

Nucor on long-term US energy policy.

Disclaimer: Nucor is a sponsor of MetalMiner.

–MetalMiner Editors

MetalMiner’s editor Lisa Reisman speaks with Jennifer Diggins, director of public affairs, Nucor, about manufacturing policy.

In our first Nucor interview installment, MetalMiner discussed the legislative landscape in Washington with Diggins. The verdict seems to be that nothing much is going to happen for quite some time. Other key topics of discussion: EPA regulations, long-term US energy policy, and ethanol subsidies.

In the portion of the interview above, find out what roles public/private partnerships and a renewed transportation bill could play in crafting an ideal manufacturing policy for tomorrow.

Disclaimer: Nucor is a sponsor of MetalMiner.

MetalMiner’s editor Lisa Reisman speaks with Jennifer Diggins, director of public affairs, Nucor, about government energy subsidies.

In our first Nucor interview installment, MetalMiner discussed the legislative landscape in Washington with Diggins. The verdict seems to be that nothing much is going to happen for quite some time. Other key topics of discussion: EPA regulations and the long-term US energy policy.

Where do ethanol subsidies fit into all this? Are they still in place? And what should the role of government be in subsidizing fuel (or not)?

Keep an eye out for more MetalMiner content from Nucor in the following days.

Disclaimer: Nucor is a sponsor of MetalMiner.