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The Industrialization of Commodity Trading

What asset-backed traders’ strong results mean for the future of independent traders

One after another, the commodity trading industry’s traditionally leading independent traders have been increasingly stagnating as the prices of everything, from copper to crude oil, remain stuck at rock-bottom levels. By contrast, the world’s slow-moving top asset-backed trading giants are announcing rock-solid trading results.

In The Industrialization of Commodity Trading, we argue that this turnabout shows that the commodity trading industry is obeying a new set of rules. Today’s trailblazers in the commodity world are those players that are industrializing.
 

Commodity traders that have come closest to achieving established, institutionalized global machines designed to generate earnings reliably in spite of market conditions are now at the head of the pack. As a result, tightly run, maverick independent traders are, in a rare shift of industry dynamics, following the example of asset-backed traders, rather than the other way around.

The Industrialization of Commodity Trading is the fourth of a series of pieces of research produced by Oliver Wyman which analyze the changing dynamics that are redefining the commodity trading industry. This library of research is more relevant than ever not only for commodity industry leaders interested in getting ahead but also for any company that relies on commodities to produce its products. Please feel free to contact us for more information.  

The Industrialization of Commodity Trading


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