Small and medium enterprises engaged in physical metals trading face a number of challenges when it comes to hedging, trading, moving and storing metals. There is still heavy reliance on spreadsheets and manual data manipulation in trade management, market monitoring and P&L reporting. In this set up, it is very difficult to understand how market movement affects your positions and keep a tight control on costs. Consequently, trading P&L may be compromised. Moving physical metal inventory between suppliers, depots and customers across borders with multiple transportation methods is complex to orchestrate with no formal system of record in place. There is also the challenge of how to deal with the complexities of pricing metals concentrates.
Top concerns for physical metal trading participants
Top of mind concerns for traders include not having a full picture of their combined positions, not knowing the current state of counterparty credit risk and inability to proactively track the market factors affecting P&L. For businesses trading metals concentrates, not being able to take account of the full range of variable costs when pricing multi-content contracts on the market is troubling. For logistics managers, key concerns include not knowing what the current shipping P&L is for each contract, inability to prioritise transportation activities or know the arrangements for inspection and storage.
The value a CTRM system can bring to a SME
Without a central system of record in place, SMEs engaged in physical metals trading risk facing significant financial loss. What is holding back physical metals modernising their trading infrastructure? Whilst there are many commodity trading and risk management systems on the market, many are not suitable for the needs of SME market participants. They typically offer wide-ranging functionality and require a large-scale implementation effort, which SMEs simply do not have the need nor the resources for. This is forcing them into a situation where they feel they have no choice but to ‘make do’ with basic tools.
Brady recognises the specific challenges of SME physical metals trading participants. We now offer our physical trading CTRM system Fintrade as a standard ‘out of the box’ implementation to meet just the right level of functionality required for SMEs to their budget. We offer a range of templates to select from to help market participants get up and running within a competitive timeframe, incurring no extra costs, typically associated with customised implementations.
A holistic solution from metals trading to logistics management
With Brady’s Fintrade ‘Fast Start’ solution, SMEs can act on trading opportunities quickly with real-time views of position and P&L across their metals trading portfolio. They can properly link shipments to underlying physical contracts to ensure invoicing is accurate to avoid settlement delays. Metal can be delivered from the most optimal location with a centralised view of all types, statuses, and balances of inventory across different locations. Fintrade offers advanced concentrates functionality to support more accurate pricing of multi-content contracts. Logistics costs can be better managed with traceability throughout the logistics network. Documentation associated in the planning, tracking, collection and delivery processes can be easily accessed to afford a more efficient logistics process.
Brady offers an alternative. We help SMEs to increase the productivity of their metals trading operations at an affordable price.