Cost Insights
by PowerAdvocate

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

The Top Chemicals Utilities Should Be Saving on Today

November 12, 2015 at 11:07 AM / by PowerAdvocate

This year, with crude, gas, and diesel prices in a continued slump, we’ve advised our readers to capitalize on market changes by negotiating prices with freight suppliers. When steel prices started declining we said to go look for savings on  items that are highly exposed to steel.

Now, we want share another savings opportunity available to you when it comes to purchasing chemicals. Chemicals are one of the few raw materials that utilities actually buy, so savings from commodity price declines are much more direct than they would be for fuel and steel. What’s more, the prices of the most common chemicals purchased by utility companies are down, mainly due to an imbalance in supply and demand, and a drop in feedstock costs.

If your unit prices for any of the chemicals below have been staying steady for the last year it’s time to talk to your suppliers and get them in line with the market. If you aren’t buying chemicals directly, look to negotiate with your suppliers who are.

The most effective negotiation strategies include actual market data, like the graphs we’ve included below, to support your position. Each graph below illustrates how the market price of a given chemical has dropped over the last year.

These types of price shifts typically don’t last for long, so now is the time to go look for savings. To see a more complete list of chemicals to save on, click here.

Chemicals You Should Be Saving On:

1. Caustic Soda: 19.0% Decline

 

 

 

 

 

 

 

 

2. Urea: 18.8% Decline

3. Nitrogen: 11.2% Decline

4. Water Treatment Resins: 11.1% Decline

5. Ammonia: 9.4% Decline



Click here to download the full list of chemicals to save on.

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