Commodities lay a basis for a global economy. Therefore it does not come as a surprise that the commodities market is extensively discussed and analyzed in the mainstream economic titles. Supply chain disruptions, divagations on national security in the context of an access to the key materials for defense and technology sectors, frequently come up on front pages of opinion making medias. It is pitiful however that the very mechanism …
Physical commodity trading is considered to be a highly stressful occupation. Markets are volatile and we need to deal with a number of counterparties at the same time – a real time, in different time zones. In physical trading – trading and logistics (called very often traffic and/or operations) are inseparably linked. As a trader you cannot just make a deal and let logistics deal with minutiae of a delivery. …
Contracts in commodities trading industry, even if differ in fine print and general terms and conditions attached, tend to be quiet standardized. There are key elements dictated by the nature of the business itself, appearing in majority of contracts and containing certain standard formulations. Those key terms naturally bring the attention of experienced trader, who happen to peruse over the contract. We will focus on them in discussion below. Each …
Usually a negotiation process in commodity trading starts with obtaining of enquiry. Selling is always more difficult than buying, so you start from the sale side. Obviously it does not preclude a situation when you have an access, either due to sheer luck or relationships build to a commodity which is either rare on the market or cheap, or has desirable specification, for which market is very liquid or which …
There are people out there at trading houses, financial institutions and all sorts of media providers called analysts. What they do all day is analyze the market, the data (external and internal) and come up with actionable insights. Hence analysis deserves a dedicated role on its own, and is closely linked to research, which again is something you could do full time. Yet here we will talk about different type …
From a trader’s perspective commodities market comprises of: a) producers b) consumers c) other trading entities d) auxiliary service providers Producers obviously are involved in production of commodities and include as diverse examples as: farm cooperatives, mines, oil fields. When we look at producers, we need to discern the level of processing involved, for the same commodity. To show what I mean by a level of processing, let’s take metals …
Mission of physical Commodities Academy in London is to attract talents into industry we love, train them and present with prospects for further professional development. Physical commodities trading requires a highly specialized set of skills, which can be relatively quickly taught to candidates from a variety of backgrounds. Since physical commodities trading includes aspects of market research and analysis/logistics/warehousing/contract formation/quality management/derivatives markets and international trade, the training is both interesting …
Paper trading, defined as trading derivatives and commodities on OTC paper markets (look no further than paper market for grains in Hamburg, if you try to second guess what I mean) enjoyed for long much more attention than physical trading. Physical trading stayed in the shadow radiating the aura of obscurity. In major world commercial centers, the openings for paper traders have been much more plentiful than for physical traders. …
As a teenager I was living in industrial area. I have been seeing long trains, carrying wagons full of coal and huge tankers departing from the port on regular basis. On many occasions I was wondering who are the people buying and selling these huge amounts of commodities. How does the market for commodities look like? How the transport and financing is being organized. How does it even make sense …
