Commodity Risk Management

The prices for commodities are moving up and down very fast these days. Whether you are a manufacturing company, an energy company or a bank, this could have a major impact on your profitability.

However, price risk is not the only risk. There are many other risks that you and your company are facing. Credit risk and operational risk are among the most important ones. You have to make an assessment of the risks that you are facing, as well as of how these risks should be managed. As price, credit and operational risks have a close relationship, we recommend the implementation of an integrated company-wide system.

Commodity risk issues

You could already be very sophisticated in risk management. You could still be thinking of introducing a risk management framework. No matter at what stage you are, you will have to deal with certain issues, such as:

• How to do the design, implementation or assessment of a risk management strategy?
• Should we introduce an enterprise risk management framework?
• How to write a risk policy and risk management procedures?
• How to improve our process management?
• Specific issues such as:
  • How to calculate VaR and set VaR limits?
  • How to build forward curves?

Forward Curve Creator

With our Forward Curve Creator you can create up-to-date forward hourly price curves yourself, without having to employ expensive modeling experts. Our model is specifically suitable for every electricity supplier or trader, big or small, who delivers or deals with non-standard electricity contracts with variable (not only base-load and peak-load) delivery schedules.

Maycroft Risk Scan

Research shows that the hot topic among energy companies in 2009 is Risk Management. Maycroft introduces a new service called the Maycroft Risk Scan. This is a fixed price product that will support you to strengthen your risk management framework and bring it up to the best practice standards within the industry.