What’s going on here?
The world’s biggest independent commodity trader decided that metals are the way to go.
What does this mean?
Vitol made $13 billion in profit last year, which mainly came from energy investments –think oil, natural gas, and power generation systems. Yet this week, Vitol confirmed that it’s moving at least one eye onto the metals market after a long time spent turned away. The trading firm predicts that the next decade will be a biggie for metals, and the second-biggest commodity trader agrees. Trafigura expects that the rise of electrically powered systems –electric vehicle charging stations, renewable energy, and AI data centers –will lead to an insatiable appetite for their key ingredient, copper.
Why should I care?
For markets: Copper is a showstopper.
Trafigura believes that by 2030, supply of copper will land four to five million metric tons shy of demand. To make matters worse, the firm says that AI systems and data centers could potentially add another million to that deficit. And because companies will pay up for their lot, not least because copper could make or break their AI ambitions, the metal’s price could hit the sky. It’s already started the ascent: the price of copper hit a 15-month high on Wednesday, and copper miners’ share prices are on the up as well, since higher prices would pad out their profit margins.
The bigger picture: Hedge your bets.
Higher commodity prices feed into prices of everyday stuff –it’s basically impossible to make anything without metal or energy, after all. So if prices stay higher for longer, that raises the risk of an inflation sequel and makes it harder for central banks to trim interest rates –and remember, higher rates can weigh on stocks. Commodities could be worth a look, then. Not only do they let investors catch a ride while prices are high, but they could hedge a portfolio against inflation and stock market dips.
FAQs
16 Largest Firms (Worldwide)
- Vitol. The company engages in the extraction, trade, refining, storage, and transport of energy. ...
- Glencore. ...
- Cargill. ...
- Koch Industries. ...
- Archer Daniels Midland. ...
- Gunvor International. ...
- Trafigura. ...
- Mercuria.
Some of the world's biggest energy trading companies are returning to metals, years after getting burnt in the notoriously difficult markets. Vitol Group, Gunvor Group and Mercuria Energy Group are among the traders building out their metals teams, as they look to deploy capital generated by record profits.
Who are the Big 4 commodity traders? ›
The first introduces the four big commodity traders – Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus – which are the focus of this study. Collectively, these trading companies are often referred to as 'the ABCD companies' because of the coincidence of their initials.
Do commodity traders make a lot of money? ›
The average salary for commodity traders is $94,081 per year . This salary may vary based on available commission rates or the location where you work.
Who is the number 1 trader in the world? ›
Of course, George Soros is one of the top Forex traders. Perhaps, he is the best Forex trader in the world, and, for sure, he is the best day trader in the world. Soros was born in 1930 in Hungary. A Jew by nationality, the name given to him at birth was Gyorgy Schwartz.
What is the number 1 commodity? ›
1. Brent Crude Oil. Brent Crude oil is the most traded global commodity.
What is the most traded metal in the world? ›
Metal Trading – Gold
- It is regarded as a safe haven asset during times of economic or geopolitical uncertainties.
- It is used as a hedge against inflation, political instability, and currency fluctuations.
- It is a finite resource, with limited supply, unlike fiat currencies that can be printed or digitally created.
With revenues of $505 billion in 2022, Vitol is the largest independent energy trader in the world, and would be the second-largest company worldwide as measured by revenue on the Fortune Global 500 list.
Is there really a shortage of energy? ›
A global energy crisis began in the aftermath of the COVID-19 pandemic in 2021, with much of the globe facing shortages and increased prices in oil, gas and electricity markets.
What are the top 3 commodities to invest? ›
Three of the most commonly traded commodities include oil, gold, and base metals.
Switzerland is one of the world's most important commodities trading hubs. There are over 900 commodities trading companies in Switzerland. Most of them are based in Geneva, Zug and Lugano.
Who are the ABCD commodity traders? ›
The four dominant agricultural trading firms—the ABCDs (ADM, Bunge, Cargill and Louis-Dreyfus)—have a long history dating back to the 1800s and early 1900s.
Who is the richest commodity trader? ›
Radhakishan Damani: Radhakishan Damani is India's wealthiest Trading Market investor and the owner of D-mart. People used to call him as Mr.
How many hours do commodity traders work? ›
Position Type and Expected Hours Of Work
Typical hours of work are Monday through Friday from 8:00am-4:30pm and may fluctuate with business needs. US Commodities operates in time-sensitive, global markets, so the exigencies of the business may alter working hours.
Which commodity is most profitable? ›
Crude oil ranks as one of the most traded commodities in the world. Commodity traders who had taken long positions on crude oil last year made a lot of money. Crude oil prices decreased in 2020 as a result of COVID-19 and the consequent global lockdowns. However, the rate of immunisations increased in 2021.
What is the largest traded commodity in the world? ›
Crude oil is the most traded commodity in the world. This commodity is desirable to long and short-term traders because of its high volatility in price. The fluctuations in price make this commodity a lucrative asset if traded successfully.
Who is the largest commodity producer in the world? ›
China is the world's single-largest producer of coal, several base metals, and fertilizers, while other EM7 are also key suppliers of several commodities. As a result, policies that affect EM7 commodity production—such as recent trade- and security-related measures—can move global markets.
What is the world's most heavily trade commodity? ›
Crude Oil (USOIL.
It is also known as “black gold,” which places it at the forefront of commodity trading, fueling industries, transportation, and global economies.
