Oliver Wyman Predicts Major Commodity Trading Industry Shake-Up
NEW YORK, September 17, 2012 — The commodity trading industry is about to undergo its biggest transformation in 30 years, predicts a report released by leading global management consulting firm Oliver Wyman. "The Dawn of a New Order in Commodity Trading" argues that, as a result of rising financing costs and competition, the global commodity trading industry will see significant acquisitions, investments, public offerings, and new entrants in coming years.
"The rules guiding the commodity trading industry are being rewritten," says co-author Roland Rechtsteiner, partner and head of Oliver Wyman's Global Risk & Trading division. "Traders need to invest in assets so that they can profit from managing a range of options in relation to the time, location, quality, lot size, and logistics of their sourcing."
"Whoever reacts most quickly when grey swans appear has the best opportunity to capture a profit," says co-author Graham Sharp, co-founder of Trafigura and a senior advisor to Oliver Wyman. "Traders need global coverage both to see all of the options that may exist in a particular commodity stream and to be able to react swiftly to grey swan events wherever they occur."
The new report contains the results of an Oliver Wyman commodity trading survey which shows that commodity traders earned higher gross margins in 2011 than in 2010. It also makes recommendations for how traders can build logistical networks at the lowest cost and attract the talent to optimize them so that they will ultimately emerge as the industry's leaders.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.