SpendEdge has been monitoring the global coke industry and the industry is poised to experience spend growth of more than USD 6 billion between 2019-2024 at a CAGR of over 7% during the forecast period. Request Free Sample Pages.
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SpendEdge, a global procurement market intelligence firm, has announced the release of its Global Coke Industry - Procurement Intelligence Report. (Graphic: Business Wire)
Read the 128-page research report with TOC and LOE on "The Global Coke Industry – Procurement Intelligence Report, Pricing Outlook in Geographies that include APAC, North America, South America, and MEA, and insights into best practices to optimize procurement spend."
Buyers from the electricity and power generation plants are replacing coal with coke to attain energy efficiency. Coke is being used as one of the key components in the production of steel that is observing an exponential demand across the globe. These factors are paving the way for substantial spend growth in the coke industry. However, high carbon emission caused by the production of this mineral is inviting stringency from environmental conservation authorities which is restricting the industry spend momentum.
The growing demand from the construction and power generation industries coupled with the increasing supply with the initiation of oil refinery expansion projects is bringing stability in the demand and supply ratio in the coke industry in APAC. In the US, the cement industry is emerging as the chief end-user of coke as it is exhibiting an extensive adoption of this mineral as an energy-efficient fuel in cement kilns. This is driving spend growth in the coke industry in the US.
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Insights into the industry pricing trends
- The price of crude oil which is one of the critical raw materials in the production of coke will undergo extreme volatility owing to factors such as dwindling reserves and trade war between nations. According to the coke price trends, this will exert a negative impact on the overall price in the coke industry.
- Spot pricing is one of the widely adopted pricing models in the coke industry. Spot pricing allows buyers to procure in varying quantities of coke depending on their requirements. This can help the buyers gain cost benefits from a sudden decline in prices of raw materials such as coke.
What are the strategies to adopt to optimize procurement spend in this industry?
This procurement intelligence report has listed the top coke suppliers, SLA agreement insights, and the selection and negotiation strategies that buyers must undertake to achieve optimal procurement in this industry.
Build long-term strategic relationships with coke suppliers
Building strategic relationships with suppliers is a key practice while procuring coke from suppliers, as it helps the former to influence the location of new coke oven facilities. For example, buyers can influence suppliers to build new facilities within 100 miles of their operational units. This will result in significant cost-savings for buyers, as transportations cost accounts for nearly 30% of the final cost of coke incurred by buyers.
Include price renegotiation clause in the SLA
With forecasts of a substantial increase in coke prices through the forecast period, it is prudent of buyers to include a clause in the SLA, which will allow them to renegotiate on pricing if there is a steep increase in the price of coke. It commands more relevance owing to the extremely volatile nature of this industry due to its dependence on fossil fuel and coking coal. The inclusion of this clause will enable buyers to enhance cost savings whenever the opportunity arises.
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Some of the key topics covered in this report are:
- Coke industry spend segmentation by region
- Total cost of ownership analysis in the coke industry
- Regional spend opportunity for coke suppliers
- Coke suppliers cost structures
- Coke pricing models analysis
- Coke procurement best practices
- Category management objectives
- Cost saving opportunities in the coke industry
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