Chemical Trading

What Is Chemical Trading?

Given that the global market volume for chemicals will significantly grow in the next two decades with an estimated increase in the sales volumes, the best time to be a chemical trader is right now. It is always best to learn about chemical trading by starting with the basics. Chemical trading is a safe and efficient manner of handling industrial chemicals. It is easy for a company to convert overhead into a revenue stream when working with a company that excels in this market. 

Benefits of Trading

Repurposing industrial waste is important for companies in the chemical industry. Taking the proper steps in the repurposing of chemical materials requires constant and efficient waste management that will both remove waste and earn money. Chemical trading has become a viable option for certain industries since it pays for contaminated or distressed chemicals.

Challenges in Trading

The chemical industry is facing structural changes. While competitors all over the world are putting pressure on industrial chemical companies, capital market pressures are causing conglomerates to split into smaller, focused entities that specialize in specific applications.

Raw material costs, exchange rates, and tariffs are so volatile that chemical trading requires a level of flexibility and speed in the handling of trading contracts and price management. Traders who do not have the requisite tools will lose out of the market.

These are challenging times for independent chemicals traders because the trading on the chemicals is increasingly controlled by a handful of large corporations. With the influence on the production side of so many products on their side, the bargaining position that big business holds has put smaller businesses in dire straits. Those who fight to stay afloat find that the margins are getting smaller with each deal. Others have had to join the big corporations since they can’t “beat them”.

Trends

The majority of consumer products in the world contains chemicals. The clothes on our backs, our bathroom toiletries, the vehicles we travel in, the buildings we live in and even the food with we eat. Chemicals are critical to healthcare, home and personal care, paints aerospace, automotive manufacture and construction. In essence, the chemical sector is a vital part of the global economy.

Since most of the materials consumed by mankind comprise of chemicals and the world’s population is on the increase, it is easy to predict what the demand for chemical products would be in the future. In light of this, it is likely that chemical trading will be focused on the following areas:

• Formulated products and healthcare.
• Composite materials
• Materials for energy, including photovoltaics and materials for energy storage

While expectations of future sales growth are fine, it’s more important that traders assess the markets in these transactions. In the future, being able to capture the value through smart monetizing strategies will become even more important in future as more companies will be conducting extensive commercial or market due diligence to gain additional market insight.

Chemical trading and supply chain software is category of software that allows supplier and counterparties to trade and share logistics information through an integrated system. For the chemical industry, the products are usually feedstock or purity products such as Benzene, Propylene, and various sort of polymers.

EnHelix Chemical Trading and Supply Chain Software

The EnHelix software is a great Chemical and Petroleum Supply Chain Software. It offers an ideal structure for chemical manufacturing; the feedstock procurement meant for chemical manufacturing; trading and transporting. With EnHelix, you get a better assessment of your chemical supply chain. This way, you are able to make better decisions that are essential for feedstock management and ultimately, increased profitability and the optimization of your business.

Business Benefits

• One of the failings of the traditional contractual transaction methods of feedstock procurement is that it takes a lot of time. The EnHelix software is one the best Chemical and Petroleum Supply Chain Software as it supports feedstock procurement contracts, and facilitates chemical trading. Intermediaries are reduced if not eliminated, and more resources are saved with smart contracts where all agreements are automatically signed, validated, and enforced. The automated system and smart contracts which the EnHelix software offers, makes these energy trades quicker and more organized for businesses
• EnHelix software is also ideal for risk management. In what way you might ask? By standardizing and automating your chemical supply chain and other systems of physical trades reduces frauds, operational risks and advances payment. The software streamlines chemical trading with applications which support every step of the process from the pre-trade KYC, through trade execution to the post-trade risk management.
• The EnHelix software also enhances the chemical supply chain by enabling the distribution of chemical products. This software is used by midstream, cargo and logistics companies for the scheduling of feedstock supply.
• The EnHelix software also aids the chemical trading, feedstock supply and logistics system via blockchain. Blockchain digitalizes transactions to improve transparency and enhance security and compliance on products deliveries. Streamlining your trading processes with blockchain leads to improved speed and security, which is great for everyone on the chemical supply chain.