Maximum Price Agreements
Do you want to gain protection from rising prices and benefit from falling bunker prices..
How it works
- If the market spot price is below the agreed maximum price, you pay the spot price over the period of the agreement.
If the market spot price is above the maximum price, you still only pay the maximum price over the period of the agreement.
Example
- You buy 10,000 metric tons of Singapore HSFO 380 bunker fuel per month in the first quarter 2011 from Chemoil at HSFO 380 CST Mean of Platts Singapore (MOPS) full month average +$2 and +$5/mt, with a maximum agreed price of $340/mt. The $5/mt is the additional premium for having this protection level.
- In the first month the MOPS 380 CST full month average + $7/mt equates to $350/mt. You pay Chemoil $340 and save $10/mt.
In the second month the MOPS 380 CST full month average + $7/mt equates to $335/mt. You pay Chemoil the market price $335.
In the third month the MOPS 380 CST full month average + $7/mt equates to $355/mt. You pay Chemoil $340 and save $15/mt.
