Case Study
Metal Trading: Complete System Transformation
Background
Precious Metals Trading is extremely niche within the physical commodity market. Metals are scarce with key primary suppliers which are notably key Mines from suppliers such as Anglo American who supply these raw materials to larger precious metals distributors.
Some metals such as Platinum and Palladium are in demand and as such the markets for these are liquid and require real time risk management due to the price volatility we have seen over the last few years. Rarer metals such as Osmium are illiquid and prices tend to be flat and do not require such real time monitoring.
In all scenarios however, it is essential that all transactions are managed within a dedicated trading system that allows for:
- Real time Mark to Market calculations in order to ascertain a current market value
- Transaction simulations such as PFE (Potential Future Exposures) that run simulations to
Model scenarios based on scenarios such as price fluctuations - Real time hedging strategies applied to mitigate risk exposures
- auditable system that complies the major finance regulatory bodies across the globe
HIGHLIGHTS & BENEFITS
System transformation
- Implementation of a sophisticated Trading and Risk Management platform
Process transformation
- Business Process Redesign allowing for single global platform with common processes
Increased revenue and profits
- Revenue growth, stemming from the ability to offer enhanced products and complex hedging strategies to minimise risk exposures
Risk management
- Ability to offer hedging strategies to mitigate market volatility
OUTCOMES
Operational Efficiencies
- Streamlined trading processes resulted in significant operational efficiency gains.
- Reduction in manual management of trading function
