Asset 9: Commercial Pricing & Freight Terminal (Session 2)

TILLSKILL COMMERCIAL TERMINAL

Session 2: Price Discovery & Logistics Arbitrage

Calculate the Final Settlement for a floating M+1 physical contract. Determine the LME average, apply the Physical Premium, and execute the Provisional/Final invoice cash flow reconciliation.

1. Contract Formula Inputs

LME Base (Quotational Period)

Sum of Daily LME Prices ($):

LME Trading Days in Month:

Physical Economics

Volume Shipped (Tons):

Negotiated Premium ($/Ton):

Provisional Cash Flow

Estimated Prov. Price ($/Ton):

Prov. Cash Received (%):

2. Trading Desk Dashboard

LME Base Average

$0 / Ton

(Mathematical arithmetic mean of the QP)

Final Contract Price

$0 / Ton

(LME Average + Physical Premium)

Provisional Cash Received

$0 USD

(Immediate liquidity secured upon loading)

Final Settlement Balance

AWAITING CALCULATION

(Cash due upon conclusion of QP)

Valuation Status

Input formula parameters to execute settlement.

Calculate the hidden margin arbitrage available to sellers by controlling ocean freight under CIF Incoterms, and compare the absolute profit against a standard FOB delivery.

1. Freight Margin Parameters

Cargo Economics

Total Volume (Tons):

FOB Extraction/Loading Cost:

FOB Sale Price:

CIF Logistics Arbitrage

Actual Bulk Freight Cost ($/Ton):

Freight Charged to Buyer ($/Ton):

2. Incoterms Margin Dashboard

Base FOB Profit

$0 USD

(Profit without controlling logistics)

Hidden CIF Logistics Margin

$0 USD

(Profit captured by marking up freight costs)

Total CIF Enterprise Profit

AWAITING CALCULATION

(Base FOB Profit + Hidden Logistics Margin)

Incoterms Strategy

Input freight parameters to determine optimal incoterm.