Commodity Pricing

Most pricing is negotiated between buyers and sellers based on a range of factors including but not limited to, market prices that reflect a similar offering of products based around a commodity specification and a daily market survey for example by Platts.

The commodity that Alchemie Energy has the ability to sell is often sold at substantial discount from the market price. The discount given by the Seller for the commodity as well as its will to pay fees from its side to intermediaries reflects the need of the Seller to close the sales opportunity fast. This can be due to different reasons:

• Seller might have been provided an extra allocation from a Supplier for a certain term.
• Seller might have had some contract cancelled which has provided the sales cover for its normal Commodity allocation volume.
• The seller or its producer due to unexpected cancellations and delays may be incurring demurrage and storage penalties as well as having production and transportation blockages.

Within the price Alchemie Energy will include its remuneration, normally passing on some of the discount, as well as pay its Associates and other intermediaries (which can be guaranteed by a separate fee agreement or incorporated into the main supply agreement).

Commissions from Suppliers

Why can’t the Seller pay commissions?  Mainly the fees payable to the intermediaries are agreed with the Buyer and are covered under a separate Intermediary Fee Protection Agreement or in the main supply contract. In rare situations the fees are paid by the Seller, but this is not a common practice  for several reasons, one of them is that the payment of fees is more easily secured if the transfer is generated by the Buyer separately to the Seller of the Commodity and separately to the Intermediary. The situation where the Seller passes the fees to the Intermediary after getting the total sum from the buyer creates a potential need for legal enforcement of the fees payment on behalf of the Intermediary towards the Seller.

In some cases the Seller suggest to the intermediary the fees to be paid from his side in addition to the fees agreed with the Buyer, this is a clear reflection of the seller’s need to find a buyer fast.