The supplier and alliance market domain 219
Greater Certainty
- Greater certainty can allow you
to set your prices to your
customers more aggressively - Utilize your capacity better
- Drive down your fixed costs per
unit - Make you more competitive
VALUE CHAIN –
Ni to AUTO
SUPPLY CHAIN CRITICAL ISSUES
- Fixed prices can only be provided on
commitments to purchase fixed volumes - The longer the advanced notice of future
demand the greater the opportunity to
provide attractive pricing solutions - Uncertainties force the inclusion of safety
cushions in all the pricing throughout the
value chain - Better communication reduces the need for
safety cushions in prices and makes
everyone's product more competitive- Transvaal Nickel Mines' LME expertise
- strategies to benefit from Ni volatility
- facilitate fixed price quotations
- minimize financial exposure flr & clg
- Transvaal Nickel Mines' size allows it to
receive preferential treatment from LME
brokers - Access to greater market knowledge
than any individual industrial user
Commercial Needs
TNM sellsbased on
LME price
purchasesSVM
nickel atvariable
price
TURBOCOseeks fixed
price fromALLOYCO
TRANSCOseeks fixed
TURBOCOprice from
seeks fixedCARCO
price fromTRANSCO
seeks fixedCustomer
price fromCARCO
DEMAND & COMMUNICATION
priceFull
exposure
prices toHigher
exposureoffset
prices toHigher
TURBOoffset
price
prices toHigher
TRANSCOoffset
price
Figure 3.3.2 (continued)