Commodity traders in Singapore, similar to their peers on Wall Street, could see their bonuses fall by as much as 75% as prices of oil and precious metals plunge.

“We are hearing anywhere from 60% to 75% cuts,” says Deborah Sawyer, partner at executive recruitment agency Odgers Ray & Berndtson.

According to global estimates by recruitment firm Kennedy Associates, the best paid metals and energy traders should earn US$1m to US$1.5m in salary, bonus and related pay this year, down from US$5m to US$8m in 2007.

Pernille Storm, director of banking and financial services at Hudson Singapore, says traders get heavily compensated for the profit/fees they bring into the bank. In a highly volatile market, where trading volumes have diminished substantially in the past six months, it is unlikely profits and bonuses will be as large as last year.

Over the past several years, the commodities trading space has got “quite overheated” and a lot of firms opened up commodities trading desks, she says.

“Now that the volumes and prices has come down, the market has become much more competitive and it is increasingly difficult to make sufficient levels of profit to keep the desks, and the entire support structure of middle and back office, open,” Storm explains.

She says some firms have at the same time taken “full advantage” of this shift and snapped up high profile commodities traders to strengthen their market share.