What commodities are best to trade in the mid/long term? Talking about physical trading at Glencore, Vitol, Trafigura...etc
Currently an undergrad in Europe and I have the opportunity to work part-time as an assistant LNG or Copper trader. Physical, not paper trading. I will probably chose the LNG option as the company is a much larger and more dedicated to its physical trading business than the Copper option, but for future career options:
Which products are more profitable and have a positive long term outlook? Metals, Oil, LNG, Agricultural products..?
Commodity markets are cyclical in nature, so profitability varies during the course of your career. There is money to be made in all markets but LNG's future looks particularly promising since a lot of growth in the fossil fuel energy space is now coming from LNG. If you are willing to put in the time at a young age then I would recommend working in the LNG space and grow with that market. Btw, take what I say with a pinch of salt as I have a bias towards the energy space.
I would AVOID LNG... crude and refined products are safe bets...LPG next
By refined do you mean products like Naphtha, Jet etc?
yes... napt, jet, gasoline, etc
Why are you saying so? If you could care to elaborate and share your reasoning I would appreciate it
i been in the market since 2006... things come and go... i been hearing LNG is the next market for the last 10 years - while it may be - I dont think its a game changer in the time line a current college grad is looking for.... while not sexy.... stick to the basics - oil, gasoline, etc
NGL was the HOT market 10 years ago and conts to grow year over year.. Nat Gas was 20 years ago etc etc
point is - get into the industry and do your best - the best oppt will find you and if you want to pick something today, tomorrow, yesterday - pick oil.
Currently in Ag - its pretty good. Compensation is lower than oil and gas. Work life balance tends to be better. Ag products aren't going anywhere. Ppl need to eat. Large crop balances worldwide & increased durability and yields have reduced volatility in recent years. Although the the past year trump tweets and tarriffs have brought some vol. into the mkt which has been fun. (or not fun) You will most likely have to spend sometime in the middle of no where in an entry level merchandising position, but should be able to move after 2-3 years. I've found you can move up the ladder to trading your own book very quickly compared to other commodities - More of a try it and see how you do attitude vs. you're not given a shot until we're completely sure. Overall think its a pretty good place to be in if you're with a reputable shop - think ABCD. (although i'd be careful about Bunge these days... )
Just adding on to the great response above, Ags are still very much an old school business. You learn from the bottom up. Those 2-3 years you spend in the country are the bases of rest of your career and are a great learning experience but they can really suck. You’ll be moving frequently between rural towns. A decent portion of your time will be spent working and eventually managing work outside. Flipping rail car lids at 3 am as a blizzard approach’s isn’t usually what people imagine when you tell them you’re a trader. Conversely, you’ll be given a lot of responsibility quickly. As a trainee/junior trader you’ll probably run the day-to-day hedge book (Depending in the product and size of the desk), you’ll buy grain, and you’ll be trading freight (Barges, trucks, trains). My friends in energy were absolutely blown away by the level of responsibility I was given as a trainee. By your 4-6th year at the company you should either have your own book on a desk, be in charge of a small elevator, or second in command of a big elevator. Compensation also can be extremely good at a reputable shop. I’ve met a number of relatively young traders (35+) at reputable shops clearing over a million a year trading grain. Even if you aren’t a star you can make solid money in grains. If you’re willing to suffer for a few years early on I think Ag’s are a great segment to be in.
Long-term, copper @ Glencore is about a good a desk as I can possibly think of.
Metals in general I think... a lot of the talk about decarbonization is focused around energy market implications, it’s really more of a metals story imo
Isn't Glencore focusing more on the originating side of the business as compared to trading currently?
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