Research by consultants at Oliver Wyman has highlighted that market volatility driven by Russia’s war in Ukraine fuelled gross margins at commodity traders to about $115 billion last year, according to a report by Bloomberg.
Research by consultants at Oliver Wyman has highlighted that market volatility driven by Russia’s war in Ukraine fuelled gross margins at commodity traders to about $115 billion last year, according to a report by Bloomberg.
Many trading companies haven’t released their annual figures yet, but if Oliver Wyman’s findings are confirmed then it would would reflect an increase of about 60% over the previous year.
Commodity prices soared following Russia’s invasion of Ukraine a little over a year ago, which along with global sanctions and export restrictions, provided commodity traders with arbitrage opportunities.
Industry gross margins have now roughly tripled from the $36 billion seen in 2018, with those of independent trading houses now far outstripping others in the sector, according to the report. According to Ernst Frankl, who leads Oliver Wyman’s global commodity trading and risk practice, hedge funds, which largely moved out of the space in 2010-2011, have rebuilt their capabailities over the last two to three years.
