-- Some of the world’s biggest energy trading companies are returning to metals, years after getting burnt in the notoriously difficult markets.Vitol Group, Gunvor Group and Mercuria Energy Group are among the traders building out their metals teams, as they look to deploy capital generated by record profits.The shift comes as forecasters turn increasingly bullish on copper, aluminum and other metals, where long-anticipated production shortfalls are starting to take shape.
Vitol is also initially focusing on aluminum, with Benjamin Seaford and William Gayner set to join from Mercuria. The world’s biggest independent oil trader has also hired an iron ore veteran to trade that paper market. In metals, it’s also common for traders to enter pre-payment deals with mining and smelting companies for future production.
Mercuria had a series of high profile difficulties in its metals book, including falling victim in 2014 to an infamous fraud involving multiple pledging of warehouse receipts at China’s Qingdao port. Later it sued a Turkish supplier for delivering painted rocks instead of $36 million of copper, while a bullish bet on zinc concentrates was countered by a flood of material from new mines.