With crude, freight, and catalyst prices down across the board, market-driven savings opportunities abound for downstream firms in 2016.
In today’s post, we focus in on the market declines in catalysts and share how 16-24% declines in catalysts like platinum and silver can yield millions in savings for downstream firms. Specifically, we’ll share where to look for savings as well as specific strategies for capturing those savings while prices are down. Read on for the top catalysts you should be saving on now.
Below, we share a few of the catalysts that have declined in the past year. The full list is available here. To quantify these declines, we track cost models on each and every catalyst commonly used by downstream firms, enabling us to track the market for catalysts as it moves over time:
Platinum: 24% Decline
Silver: 16% Decline
With the market for these top catalysts declining between 16 and 24%, what can you do to capture savings quickly?
The first step is to track how your catalyst pricing has changed over time by tracking your suppliers’ prices over the past year and identifying the trend. If costs have increased or are stagnant, this may signal an opportunity to capture savings while market conditions are favorable.
It is particularly powerful to compare your catalyst price trend to the should-cost trends in order to quantify the difference between what you’ve been paying and what you should be paying. The graph below highlights this difference, showing the market should-cost in blue compared to the supplier provided costs (prices paid) in orange. This particular firm missed out on 14% of savings from the market downturn.
By using graphs like these in direct negotiations or in bid packages during competitive sourcing events, we find that downstream firms are capturing 15+% savings on their catalyst purchases.
But the opportunity isn’t limited to catalysts. With commodities down across the board, downstream firms are finding savings across the items they buy by quickly identifying the areas with the highest opportunities to save.