Metals traders are earning billions of dollars in a second consecutive blowout year for the sector, with several top trading houses notching up record profits. Trafigura Group, which competes with Glencore Plc for the title of the world's largest metals trader, made a record profit of around $2 billion in metals trading in its financial year that ended in September, according to people familiar with the matter. Glencore, too, has been enjoying some of its best-ever profits, although its overall results have been marred by a $480 million provision related to its exposure to iron ore trader Radiant World.
The vast earnings haul meant the champagne was flowing freely at London Metal Exchange Week, the main annual gathering of the global metals industry, which concluded on Friday. Many individual traders said privately they are enjoying the best earnings of their careers, while simultaneously fielding job offers from rival companies and newer entrants looking to grab a slice of the metals boom. Continued ambiguity over whether tariffs might be imposed on copper shipped to the US has extended the bonanza, while metals including copper, gold and silver have soared to record highs.
Mercuria Energy Group, the most aggressive of a group of energy traders expanding in metals, has also had a strong year, with annual operating profits on track to match or exceed last year's level above $300 million. The company has plowed more than $4 billion into metals deals, from Congolese copper to Indonesian aluminum. IXM, the metals trading unit of miner CMOC Group Ltd., is also on track for a record year.
Vitol Group, the world's largest commodity trader, is on track for profits of more than $100 million this year, well ahead of its metals performance last year but still behind key competitors including Mercuria. Vitol is in talks to strengthen its metals team, having hired Billy Henty, who previously worked at Mercuria and Citigroup Inc., to trade iron ore in Dubai.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing