The market is still in its infancy, but demand for commodity traders is set to grow.
Some foreign investment banks and commodity trading companies have recently established a local commodities presence in China.
Ambrian Capital, a London-based corporate finance, stockbroking and commodity trading firm, has opened a metals trading office in Shanghai, according to Bloomberg. Trafigura, an independent commodity trading company is recruiting junior level staff as part of its “Future Talent” development programme in Shanghai and several overseas cities.
“I see some top investment banks and corporates recruiting traders,” says Gary Lai, associate director, financial services and commerce finance, Robert Walters China.
He says banks tend to arbitrage and speculate on price movement, while the corporate sector hedges against price risks. Hedge funds recruit more researchers than traders in China, he adds.
On the local side, Alexander Nee, principal analyst at Guojin Futures, discloses that most commodity traders are employed by “underground” hedge funds. These are usually asset management firms, commodity importing and exporting firms, and companies consuming or producing large amounts of commodities.
According to Nee, although there is ample supply of traders on the market, “very few of them are really sought after. A good trader needs to have a good understanding of commodity futures and a thorough knowledge of the relevant industries.”
Lai adds that while growth percentages in the employment market seem phenomenon, absolute headcounts are limited, and finding the right candidates is difficult. “It could also be tough for local traders to move into foreign institutions due to the huge corporate cultural difference, unless the person has studied and worked abroad.”
The pay range for a trader with five years’ experience, is 800k yuan to 2m yuan a year, says Lai.
“Though it’s a number for many financial practitioners [in China] to envy, it’s still peanuts compared to their counterparts in mature overseas markets such as Hong Kong and London.”
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