Last year’s figure is 60% higher than that registered in 2021, and almost triples pre-pandemic levels. This result was driven by the European energy crisis due to the war in Ukraine and the global economic recovery.
The overall earnings for the commodity trading they reached a record figure of US$115 trillion in 2022, that is, 60% higher than what was registered the previous year, and almost three times more than pre-pandemic levels, according to a study carried out by the consultant Oliver Wyman.
The companies that benefited the most were independent trading houses, such as Trafigura, Vitol and Glencore, which had the balance sheets to remain in the market. “This year was something of a perfect storm across all commodities, from a trade opportunity perspective,” said Ernst Frankl, a partner at the consultancy and one of the report’s authors. “Volatility is the lifeblood of what traders need to trade,” he added.
According to the research, the European energy crisis caused by the war in Ukraine, as well as the imposition of sanctions on certain Russian basic products, prompted a great change in world trade flowsleading to longer travel times and price volatility across all commodity classes.
However, the war was not the only factor contributing to the record numbers. Demand for staples also increased in 2022 as economic activity picked up after pandemic restrictions were eased and the global economy grew.said Adam Perkins, a partner at Oliver Wyman.
“We are seeing underinvestment and underproduction in all commodities anyway,” Perkins noted. “We probably would have seen an increase in volatility [en 2022] in any case”.
Among the different commodity classes, it was gas, power and carbon trading providing the biggest boost, with industry profits from all three segments up 90% compared to the previous year.
Financial players such as hedge funds also enjoyed big gains, earning an estimated $12 trillion from trading activities in 2022 up from less than $3 trillion in 2021.
With information from the Financial Times.
Source: Larepublica
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