Pit & Quarry, January 2014

FUEL PRICES month or next year a professional energy trader can use hedging strategies to mitigate the risks of price volatility Most fuel users or resellers dont have this kind of expertise in house But by only using generally available information it is possible to make an accurate precision on the direction of tomorrows fuel prices If prices are likely to go down look for sites and tanks that can wait another day before theyre going to run out By simply pushing the delivery out a day the amount of the price move becomes savings For example if an average load is 7500 gallons pushing that delivery a day when the price is moving down by 3 cents will save 225 By shifting a load forward or backward like this just once a week 11700 is saved over a year for each site Making this kind of directional price estimate is not as hard as you might think Savvy fuel purchasers monitor regional futures markets i e NYMEX to see the daily trend Generally a futures move of 2 cents or more indicates action should be taken based on this expected price move Experienced purchasing managers should be able to make an accurate directional If prices are likely to go down look for sites and tanks that can wait another day before theyre going to run out call 75 to 80 percent of the time using this model Experience shows that with recent price volatility a reasonable expectation is that 10 to 20 percent of loads can be confidently shifted to take advantage of expected price moves Its often not necessary to push or pull a full day in order to take advantage of an expected move in the market Some suppliers make price changes at noon others at 6 p m and others at midnight By working closely with a fuel carrier it is possible to take advantage of price moves by adjusting lift times relative to price change times For example if the price is expected to go up at midnight perhaps the carrier can lift at 11 30 p m and deliver early the next morning This might save considerably over lifting early in the morning and delivering later in the day In order to adjust delivery times to take advantage of short term volatility it is important to maximize carrier flexibility Some fuel carriers are not interested in making these kinds of delivery adjustments especially if it means leaving a truck idle Sometimes a carrier simply doesnt have a truck available when its needed to pick up an extra load in order to stock up on a good price Consider one of these strategies when working with carriers Make flexibility to load shifting New LOCTITE PC 9020 Backing Compound has reduced odor and is far more user friendly than traditional epoxy backing systems Features Low odor low shrinkage High compression strength High impact resistance Color changing technology assures product is fully mixed Convenient kit sizes and durable metal cans Freeze thaw stable On site application support To speak to a LOCTITE Product Specialist in your area about this and other LOCTITE products or to schedule a LOCTITE Maintenance Workshop call or visit 1800 LOCTITE or 18002635043 within Canada www henkelna com mining OO PDUNV XVHG DUH WUDGHPDUNV DQG RU UHJLVWHUHG WUDGHPDUNV RI HQNHO DQG RU LWV DIÀOLDWHV LQ WKH 8 6 DQG HOVHZKHUH UHJLVWHUHG LQ WKH 8 6 3DWHQW DQG 7UDGHPDUN 2IÀFH 2013 Henkel Corporation All rights reserved 11370 10 13 WHEN YOURE BUSTING STONES WEVE GOT YOUR BACK ING www pitandquarry com January 2014 PIT QUARRY 57