Commodity Traders: The trillion dollar club | Reuters

Probably marks a near-term top in the commodities boom, what with China changes, etc., but highly worth reading piece from Reuters:

For the small club of companies who trade the food, fuels and metals that keep the world running, the last decade has been sensational. Driven by the rise of Brazil, China, India and other fast-growing economies, the global commodities boom has turbocharged profits at the world’s biggest trading houses.

They form an exclusive group, whose loosely regulated members are often based in such tax havens as Switzerland. Together, they are worth over a trillion dollars in annual revenue and control more than half the world’s freely traded commodities. The top five piled up $629 billion in revenues last year, just below the global top five financial companies and more than the combined sales of leading players in tech or telecoms. Many amass speculative positions worth billions in raw goods, or hoard commodities in warehouses and super-tankers during periods of tight supply.

… How big are the biggest trading houses? Put it this way: two of them, Vitol and Trafigura, sold a combined 8.1 million barrels a day of oil last year. That’s equal to the combined oil exports of Saudi Arabia and Venezuela.

Or this: Glencore in 2010 controlled 55 percent of the world’s traded zinc market, and 36 percent of that for copper.

Or this: publicity-shy Vitol’s sales of $195 billion in 2010 were twice those at Apple Inc. As well as the 200 tankers it has at sea, Vitol owns storage tanks on five continents.

via Commodity Traders: The trillion dollar club | Reuters.

 

Related posts:

  1. PetroChina: Trillion-Dollar Market Cap
  2. GM, California, and America’s Multi-Trillion Dollar Pension Problem
  3. The End of the Commodity Super Cycle
  4. New Commodity Price Regime
  5. Reading: Argentina, Commodity ETFs, Swapping Rooms for Stocks, etc.

Comments

  1. nope says:

    clearly scale matters in commodity trading!

    "economies of scale" is a better sounding word than "cornering the mkt".

    • Paul Kedrosky says:

      Yes, I thought that was a nice PR move. I'll have to keep it in mindthe next time I'm thinking of cornering a market.