2020 has been a volatile year for upstream supply markets in Europe, and several key cost categories have experienced inflationary pressure. For example, since January,

• Screen costs have increased by 16.6%
• Generator costs have increased by 11.7%
• Carbon Steel Pipe costs have increased by 11.3%

Understanding how key cost markets are trending unlocks value across the entire cost management lifecycle:  from identifying market-driven opportunities and risks to support category strategy development, to executing data-driven vendor negotiations, to tying contracts to favorable indices to underpin contract resilience.

This year's economic, cultural, and health environment has elevated the industry's focus on supplier diversity initiatives. As an example, over 50% of the top 25 investor-owned utilities in the US referenced the topic in their Q2 earnings call, vs. just 20% in Q2 of last year. However, data and resource challenges can often hinder progress to stated diversity program goals.

As commodity markets rebound, the window of opportunity for mining operators to drive supply chain savings is narrowing.

In this discussion, we look at:

• Recent trends in commodity metals pricing
• How these trends represent a strategic – and narrowing – opportunity for mining operators to capture savings
• Key components of a strategic roadmap for how mining supply chains can effectively leverage current market conditions to achieve market-based savings and protect against future inflation risk

In this discussion we look at the building blocks needed to understand supply chain risk across the enterprise and dig deep into the cost structure of mining tires to answer the following questions:

• What are the drivers behind the rise and fall of mining tire prices in different regions?
• What are the bottlenecks with your supply of mining tires?
• What does the future look like for key mining tire suppliers?

Amidst the COVID-19 market downturn, midstream projects are under intense scrutiny as executives look to reduce spending in a capital-constrained environment. However, data challenges prevent firms from identifying opportunities to lower cost estimates, resulting in scrapped projects and lost bids.

As the market downturn has forced Oil and Gas operators to diligently scrutinize 2020 budgets, common data challenges are impeding E&P executives from taking swift action. 

In our most recent market report, we examine two questions raised by executives grappling with the current market crisis:

Summary

We’re excited to share that PowerAdvocate recently took part in sister company Wood Mackenzie’s Energy Summit in Houston.

Summary

• The US administration recently announced two new rounds of tariffs on $300 billion of imports from China at a rate of 10%, effective September 1 and December 15.
• This is the fourth round of US tariffs on imports from China, which now covers over $500 billion of Chinese imports, covering nearly all remaining trade with China.
• China has responded by cutting US imports and by threatening additional tariffs on US goods.
• The new tariffs largely focus upon consumer products; however, the tariffs also cover numerous steel & aluminum products in both finished and intermediate states that may impact energy supply chain teams. However, the lists will not include products for which China maintains monopolistic market share, such as rare earth minerals and barite.
• While trade negotiations between China and the US are expected to continue, should the talks fail to result in an agreement, the list 4 tariff rate is anticipated to increase to 25%, in line with lists 1 – 3.
• Supply Chain teams should evaluate how exposed they are to key commodities such as steel and aluminum and be able to evaluate potential risks to cost structure.

As oil prices continually dip below $60/bbl and margins tighten, E&Ps are facing more pressure than ever to manage costs in order to deliver more shareholder value. After recent second quarter results, even top E&Ps suffered stock plummets upwards of 30%, which analysts have attributed to rising costs of production. The challenge – and the opportunity – is for operators to exercise greater capital discipline by more surgically executing cost-cutting strategies.