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Where have all the commodities traders gone?

Commodities traders look set to be hotly pursued in 2008. It doesn’t help that there aren’t many of them.

“If you’re a commodities trader, you’re likely to get hunted,” says one retail bank’s coy head of commodities trading, who asked to remain anonymous. Demand is ferocious but the talent pool shallow, confirms Mark Pervan, senior commodity strategist at ANZ.

What’s making commodity traders so popular? There’s the little issue of oil hitting US$100 a barrel, plus Australian commodity exports worth AU$140bn (US$124bn), and Asia’s appetite for just about everything. In addition, banks from JPMorgan to Credit Suisse are targeting commodity trading for growth. So it’s hardly surprising that commodity traders’ horizons are looking so rosy.

Recruiters say oil trading teams are the biggest, the highest paid and the hardest to find, followed by precious metals teams.

It doesn’t help that with most banks expanding their commodities business globally, Australia is fast becoming a hunting ground for anyone looking to build teams offshore. Last year, for example, CBA lost its entire team to UBS, which sent half to Asia for sales and the other half to London as traders.

And the pay? Modest base, massive bonus.

Pervan says seniors earn AU$300k to AU$400k, plus three or four times that in bonuses; a junior can expect about AU$100k, plus 100% in bonus. “Taking your own position is riskier. It’s where the big money is and where the big skills are needed,” he says.

Comments (2)

  1. I am a gold/silver trader with time managing a PM Equities Fund also.

    Any interest?

  2. Returning from Overseas, Ok! Where are all these positions?

    Commodites trader & analyst Reply

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