Profits Boom at Some of the World’s Biggest Trading Companies in 2022

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The heads of the five major commodity trading companies have said 2022 was a record year for profits.

At the Financial Times Commodities Global Summit, Trafigura, Vitol, Gunvor, Mercuria, and CCI agreed that their profits would likely decrease this year due to a return to average volatility in commodity markets.

The most significant commodity traders made record profits in 2022, driven by high energy market volatility and a tenfold increase in European fuel prices due to Russia cutting off European supplies in response to Moscow’s full-scale invasion of Ukraine.

“The magnitude of that is something that I don’t think any energy market has seen,” said Jeff Webster, group chief monetary officer at Swiss-based Gunvor.

The chief financial officer of Vitol, Jeff Dellapina, predicted that the commodity markets would likely experience “volatility compression” this year.

“[Last year] was an opportunity to take advantage of decent margins. I think that is all changing a bit now,” Dellapina said. “Last year was probably a cyclical high.”

This week, Vitol announced that its revenue would increase to $505 billion in 2022 from $279 billion in the previous year.

Although Vitol has not published its 2022 revenue, several market observers believe it will more than double from already record levels in 2021 to surge past $10 billion last year, even though its accounts still need to be finalised. 

Throughout the past year, the larger trading houses benefited from having access to capital, which allowed them to continue trading even in extremely uncertain markets when capital requirements increased.

The buying and selling home sector has recorded an unprecedented success in the past year, with Trafigura, Mercuria, and Glencore each reporting record-breaking profits.

It remains to be seen if the five companies will be able to reach their ambitious targets for 2023, but it is clear that they are determined to stay ahead of their competitors and maintain their profits.

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