Physical Metals Analyst Interview
I have an interview at a small metals trading house for an analyst role but it is an opportunity that they offered to me after interviewing for another position that I didn’t get.
Since it’s a more custom role at this firm there is no job description and I have limited ideas of how to prep. It is definitely something I’m more interested in than the other role and my experience is in paper trading commodities so I have some slightly relevant experience. I am also a masters student if that matters.
I am not sure what the typical job description would be for something like this or what a firm would look for in a person for a role like this, so any info would be much appreciated.
I also haven’t found any good physical metal resources out there so does anyone have any recommendations for me to check out? I know this stuff is scarce and there is very little physical metals info on the internet.
what type of shop are they? whats their specialty within metals? it really depends. masters is worth nothing, so it doesn’t matter. derivatives experience is valuable to a point. was your deriv experience client focused? did you manage accounts? or only a pure trading/managing risk type of role?
They are an alloying ferrous shop, they weren’t clear but it seems like this would be for their minor metals desk. Deriv experience was also an analyst role but I had a lot of exposure to almost everything in the shop since it was very small yet had quite a large amount of capital. Unfortunately I don’t have much experience in client facing roles but I know how important relationships are in physical.
actually, my mistake. when you say “analyst role” you mean a research role right? so you were already a researcher and are now interviewing for a commercial role at a physical shop?
I was an analyst as in the level before a junior trader. But it was a very small prop shop so I did almost everything the main trader didn’t with some overlap. Generated trade ideas and market commentaries, executed trades, rolled-over contracts etc.
yeah. if the new shop wants you for a commercial role, then your responsibilities will be very different from your previous experience. initially, hedging of ferrous metals is pretty limited. there are some markets that are developing liquidity for HRC and scrap on the LME and CME but it’s nothing compared to base metals. minor metals liquidity is even less (or nonexistent even). don’t know how much the derivs background will help here. those types of shops in my experience are mostly trading phys on a b2b basis, unhedged and very much a relationship business with a strong logistical component. i do think your researching/modeling skills could be useful to predict and understand market dynamics.
adding to the above, regarding knowledge that will be helpful for these roles:
1) understanding the qualities/types of metal they actually trade. also to understand who are your counterparts (suppliers and consumers).
2) knowledge of incoterms
3) knowledge of payment terms (CAD, TT, LC, DP, etc)
4) based on point 1 you will understand who are the relevant countries in the flow of your metal
5) financing costs (just your regular cost of financing formulas based on how the cash flow of each deal works)
Thank you for the in-depth answers, appreciate it. I will make sure to learn as much of these as I can. I wasn’t sure which part of my experience would be relevant (if any) but thanks for pointing it out, I’ll try to highlight that. After the second interview HR said the president of the firm thought I had potential and liked me so I’m sure I can overcome the irrelevant experience so long as I continue to cover my bases and show my interest.
Do you happen to have any good resources for the industry as a whole? Not much on the internet besides the small bit of info from a primer and some firms websites.
not a lot of metal specific books. Metal Men comes to mind, i’ve heard about it but never read it myself as it appears a bit hard to find. i would also take a look at trafiguras commodities demystified handbook.
other than that simply search for inco/payment term guides, how title transfer works, etc on google. i’d also try to understand the specific alloys they trade and research what they are used for and how they are made.
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