Cost Insights
by PowerAdvocate

Intelligence for energy companies seeking a data-driven approach to cost management

Top 6 Steel-Based Savings Opportunities for Refiners

August 6, 2015 at 4:51 PM / by PowerAdvocate

Steel's declined >30% over the last year. Have you been capturing the resulting savings?

The decline in steel should have caused significant cost reductions in many of the items refiners buy, but suppliers may not pass along those savings. To capture savings, refiners need to use market data to understand suppliers' input costs and proactively negotiate cost reductions.

In today's post, we provide a starter packet to negotiating some of the top steel-based savings opportunities for refiners. For each category, we show:

  • A cost model that illustrates the breakdown of constituent input costs, including commodities, services, margin, and overhead
  • A "should-cost" diagram that shows how the combined impact of all those input costs should have made the item's costs move over time
Here are the top 6 places to look for savings from steel:

1. Carbon Steel Pipe

  Carbon Steel Pipe

 

2. Structural Steel

Structural Steel

 

3. Heat Exchangers

Heat Exchangers

 

4. Tanks and Vessels

Tanks and Vessels

 

5. Pipe Fittings

Pipe Fittings

 

6. Rotating Equipment

Rotating Equipment

 

Interested in accessing more detailed cost models?

Click here to contact our Energy Intelligence team to learn more.

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