LONDON--(BUSINESS WIRE)--Global procurement intelligence advisory firm, SpendEdge, has announced the release of their ‘Butane Market Procurement Research Report.’ The insights and data in this report provide a strategic analysis of the supply markets, factors influencing purchasing decisions, procurement best practices, pricing models, supplier landscape, and an analysis of the supplier capability matrix for the utilities industry. This report breaks down the data and analysis behind the procurement of butane and acts as an all-inclusive guide for making smart purchasing decisions.
“The growing demand for butane can be attributed to the increase in the production of natural gas globally which has led to a higher production of butane while encouraging suppliers to enhance their production capacities,” says SpendEdge procurement analyst Angad Singh. “APAC is one of the leading markets for butane in terms of consumption due to the high demand for butane from segments such as domestic fuel, automotive fuel, chemicals, and consumer products,” added Angad.
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Key Report Features
|Supply Market Insights||Negotiation Strategies|
|Procurement Best Practices||Category Risk Analysis|
|Cost Saving Opportunities||Key Supplier Analysis|
|Pricing Models||Supplier Capability Matrix|
- The growing demand for butane can be attributed to the to increased demand for LPG, which contains around 85% of butane by volume. This is leading to a major shift in the choice of domestic fuel from traditional fuels such as wood, coal, and kerosene to LPG. Also, local governments are raising awareness about the harmful effects of traditional fuels and are encouraging the adoption of LPG which is eco-friendly when compared to traditional and other fossil fuels such as gasoline.
- The buyers in this market should engage in long-term contracts with suppliers. This helps them in obtaining huge discounts and value-added services such as training of workers regarding the safe handling of butane. Also engaging in long-term contracts help buyers in optimizing threshold prices.
- One of the key challenges faced by the buyers in this market includes challenges in procuring data regarding suppliers’ operations. The buyers may find it difficult to access the data associated with the working of suppliers' production facilities. Hence engaging in strategic partnerships with preferred suppliers and including NDA in SLAs would help the buyers overcome this challenge.
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Butane Industry Pricing Trends
Volume-based pricing and spot pricing are the two most widely adopted pricing models in the butane industry. Volume-based pricing is used predominantly by large buyers to leverage the large scale of their procurements for obtaining discounts and value-additions. The buyers can gain cost benefits of sudden drops in prices of raw materials such as natural gas or crude oil in the spot-pricing model. It also helps the buyers in procuring varying quantities, depending on their requirements.
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