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Aurex Insights: APAC Bulk – May 2022

The latest edition of Aurex Group's monthly snapshot for metals and bulk commodities in APAC is now available! This issue sheds light on the changes in the commodity markets, as well as share some of the roles that we are currently working on.

What people are talking about

Mathew Chamberlain, Head of the London Metal Exchange (LME) is to continue his tenure there, despite initially wanting to move on to Komainu, a digital assets company backed by Nomura and billionaire hedge fund manager Alan Howard. Will this double-take be temporary or is he in it for the long haul? Will he be able to address the pain points and the resistance he initially faced from brokers and traders to keep the physical trading floor?

Mark Cutifani, CEO of Anglo American has stepped down after almost a decade. Duncan Wanbald has been appointed as the next CEO. Cutifani inherited the business at a rather tumultuous period where the market capitalization of Anglo American slumped to £4 bn. He managed to turn it around to about £55bn towards the end of his leadership. What will Wanbald’s strategy for the business be? How will he continue and build on the strong foundation left by Cutifani?

ByteTree Asset Management recently launched ‘BOLD’ on the SIX Swiss exchange. BOLD is the first exchange- traded product to combine gold and bitcoin in a single fund. What is interesting is that gold has been traditionally a safer and less volatile asset, whereas bitcoin is viewed as a volatile asset. Will the pairing of these two alternative investments have a larger market appeal? Will ‘BOLD’ survive long term, being so niche?

Europe is currently facing an alarmingly low supply of clean energy metals. Reducing its dependence on Russian energy has made the path to switch to renewable energy much quicker. Will the continent be able to make a decisive decision on how to address the shortage issue soon? Or will delays create unhealthy dependencies on unsustainable suppliers?

Gunvor has reported profits of over USD $700 mn and trading volumes of 240 mn tonnes. It’s the largest profit ever made by the firm since 2015 (USD $1.54 bn) when the company sold a majority stake in a Russian oil terminal. Will the firm continue to create profitable arbitrage opportunities from the tough measures imposed on Moscow? Or will financing trading positions become too capital intensive for Gunvor to stomach?

What we are currently working on

  • Met Coke Trader, Singapore

  • Hedge Fund Base Metals Strategist, Singapore

  • Structured Finance / Project Finance Associate, Singapore

  • Trade and Structured Finance Originator, Singapore

  • Treasury and Trade Finance Manager, Hong Kong

  • Global Head of Iron Ore, Shanghai

  • Hedge Fund Portfolio Manager, Singapore

  • Head of Carbon Origination, Singapore

  • Head of Carbon Trading, Singapore

If you are interested in any of these roles, please reach out to us via the contact details at the end of this.

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Changing local landscape: Financing in the commodity markets

The trading world has been recently thrust into the limelight. With the industry’s heavy dependence on credit lines, regulators are afraid that a default of any sort could overturn the entire financial ecosystem. Further, because of large margin calls, we are seeing a larger number of deals in the over-the-counter (OTC) market, instead of centrally cleared exchanges. The consequence of this would be greater impairment of regulatory visibility concerning positions that are negotiated bilaterally.

With banks such as JP Morgan growing wary and reviewing business with some of its commodity clients after the nickel market chaos, we may see other banks following suit. The impact of this would mean commodity traders may be forced to look elsewhere for funding and seek liquidity from national central banks. The downside of this would be, that government support is likely to come with strings attached and may even require traders to open their books up and disclose with absolute transparency.

So, what does this all mean specially for the hiring scene? Aurex Group has seen an increasing demand from our trading house clients for senior trade finance and treasury individuals who can navigate the tightening credit market and ensure that the traders have the financing to continue commercial activities. These people often come from banking environments and thus there is an education process to be done given the different cultures, ways of working, and compensation schemes.

If you are working within one of these financial institutions, and in particular from the trade/ structured trade finance departments and would like to explore opportunities within the commodity corporates please feel free to reach out to our consultants.

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Market Moves

  • Janet Kong has been announced as the new Head of Asia at Freepoint, previously the CEO of BP IST in Chicago.

  • Ian Milne has joined MonetaGo as Head of Sales Asia Pacific, previously Head of International Services at Rabobank.

  • Peter Ng has joined Amber Group as the new Chief Operating Officer (APAC), previously in a similar role with Freepoint.

  • Danny Ngu has joined Iluka Resources as a Sales Manager, previously a Bulk Commodities Trader at Vivienne Court Trading.

  • Duncan Wanbald has been appointed as the new CEO for Anglo American, previously Group Director of Strategy and Business Development.

  • Tracy Liao has joined Balyasny Asset Management as Commodities Strategist, previously in a similar role with Citi.

  • Melody Dong has joined CICC as a Commodities Strategist, previously in a similar role at Macquarie.

  • Ted Kangvhas joined KonerG as a Director, previously a Coal Trader at ST International.

I hope you enjoy our latest market insight for metals and bulks commodities. For a discussion around recent mandates, compensation, or other hiring trends, please do not hesitate to get in touch.

Alex Kerr
Director

Aurex Singapore Pte Ltd

alex@aurexgroup.com | +65 9007 218512

Marina View, #11-01 Asia Square Tower 2, Singapore 018961

EA 18S9493 | R1328009