Some of the world’s biggest energy trading companies are returning to metals, years after getting burnt in the notoriously difficult markets.
The energy giants are entering a sector that’s proven difficult to trade in the past, and one that’s largely dominated by two players: Glencore Plc and Trafigura Group. Their arrival could challenge smaller-scale metals traders, which have struggled to turn a profit in recent years as soaring energy prices and supply chain disruptions crimped demand from manufacturers.
“As a company, what we’re really doing is continuing our deep involvement in energy markets,” said Ivan Petev, global head of base metals at Gunvor. “The energy transition goes through metals — you cannot do it without metals.” Mercuria has held talks about hiring Kostas Bintas — Trafigura’s former co-head of metals and notorious copper bull — to build out a large-scale base metals trading business.
Mercuria, which already has a mine seeding business, recently held talks with Vedanta Resources over funding the restart of its Konkola Copper Mines in Zambia, according to people familiar with the matter. Vedanta didn’t respond to a request for comment, while Mercuria declined to comment.Still, Mercuria, Vitol and Gunvor are all returning to metals after previous mishaps that contributed to them winding down their trading books.