In the global power equipment industry, SF6 gas serves as a basic high-voltage insulating medium, and its price fluctuations directly affect companies’ operating expenses. Taking 2022 data as an example, the world’s SF6 gas market average price increased by 15%-20% year-on-year, which was mainly affected by the disruption of supply chain and environmental policy (such as the EU F-gas regulations), resulting in an increase of some enterprises’ procurement cost by more than 3 million yuan/year. In order to reduce the sf6 gas price, companies can prioritize the study of market demand and supply principles, such as through the use of industry reports (such as IEA statistics) found that in 2023 the global SF6 production capacity of about 56,000 tons, and demand due to new energy grid development to 62,000 tons, the gap to push up the price, at this time negotiations should be oriented towards long-term cooperation and bulk procurement advantages. For example, a power transmission and distribution company in Europe signed a three-year agreement with a supplier to obtain an 800-ton purchase every year at a unit price of 98 euros/kg, reduced from 120 euros/kg, saving 17.6% of the expenditure. In addition, the emergence of new technologies can add bargaining chips for instance, a Chinese manufacturer using a compound insulating gas (30% SF6 and 70% environmental protection gas) that meets the GB/T8905 standard, reducing gas procurement costs by 25%, saving more than 5 million yuan annually, and further reducing suppliers’ profit margins through technology upgrading bargaining.
Policy-wise, the EU is looking to reduce SF6 use by 40% by 2030, and companies can avail of discounts under the guidance of the green transformation trend. For example, a German power firm received a price concession of 8% from suppliers by agreeing to increase its purchases by 10% over five years (from 200 tonnes to 220 tonnes per year) and work together with a carbon footprint audit. At the same time, the group purchasing model can improve the bargaining power, such as the North American Power Union and 12 companies centralized procurement of SF6, with a total amount of 200 tons/year, successfully reduced the unit price from 95 US dollars/kg to 83 US dollars/kg, a reduction of 12.6%. In technology negotiations, companies can use case data, e.g., ABB’s SF6-free circuit breaker is 18% less expensive than conventional equipment, to push gas suppliers to adjust their pricing structures. In addition, better inventory control can conserve capital, with a Japanese company reducing SF6 inventory cycle from 90 days to 30 days through the JIT approach, reducing warehousing costs by 40%, and using the savings to negotiate a 2%-5% discount for pre-paid orders.
Financial products can also mitigate sf6 gas price risk. For example, a Singapore company hedged 80% of its purchases over the next 12 months through futures contracts, versus a 15% price movement due to the Russia-Ukraine war, and established flexible purchase terms based on historical precedent (SF6 price standard deviation of $22 / kg for 2019-2023). During supplier assessment, companies have to quantify transportation and service quality, e.g., a Brazilian company by comparing on-time delivery by three suppliers (92% vs. 85% vs. 78%) and gas purity (99.999% vs. 99.98%), and finally choose a premium of 3% but less than 1% annual risk of supply disruption. Total costs were reduced by 5%. Finally, technology development such as the SF6 recovery system (90% recovery efficiency) reduced new gas purchase, reducing annual consumption by 30% after being adopted by an Indian company, and bringing total returns to 25% when combined with carbon trading benefits (about €5,000 for every tonne of SF6 emission reduction certificate). Through multi-dimensional data integration and strategic collaboration, companies can reduce SF6 procurement costs by 10%-30%, significantly improving profit margins and environmental ratings.