Trafigura Scores $3 Billion Revenue on Commodities Rebound

Trafigura’s revenue virtually doubled from 2020, at the moment a document 12 months for the corporate, which scored by loading up on low cost barrels of oil when costs dropped early within the pandemic. In 2021, Trafigura benefited from the reversal of that coronavirus-induced stoop in commodity markets as demand for fuels and supplies jumped, significantly within the U.S.

Trafigura, primarily based in Singapore and run from Geneva, is among the world’s greatest impartial commodities merchants, dealing with about six in 100 barrels of oil consumed every day together with huge portions of copper, coal and different supplies. It has pursuits in mining, logistics and industrial-metal operations, and owns a hedge fund that gained 82% within the 2021 monetary 12 months. Trafigura is privately owned, however bonds issued to finance its sprawling enterprise commerce publicly.

Costs for commodities together with gasoline and copper rose as vaccines enabled the world financial system to choose up velocity. Haywire strikes in markets reminiscent of coal and pure gasoline gave alternatives for merchants to maneuver commodities from locations the place costs have been low to these the place they have been larger.

In a single signal of resurgent consumption, Trafigura traded a median of seven million barrels of oil and petroleum merchandise a day, up by 1 / 4 in contrast with its 2020 monetary 12 months. Throughout the 12 months, Trafigura traded 22.8 million metric tons of nonferrous metals together with copper and aluminum, up 9%.

“Metals carried out significantly properly,” mentioned Christophe Salmon, Trafigura’s group chief monetary officer, on Wednesday, pointing to a fast restoration in Chinese language demand and the necessity for metals reminiscent of nickel to impress swaths of the world financial system.

To date, the Omicron variant of Covid-19 hasn’t triggered Trafigura important extra logistical difficulties. “Provide chains usually over the previous 12 months have been fairly disrupted,” Mr. Salmon mentioned.

Rising costs and volumes helped offset a $716 million blow to earnings from the therapy of foreign-exchange losses when Trafigura consolidated possession of its retail-fuel enterprise Puma Vitality.

Trafigura’s bumper 12 months was marred by the deaths of three staff and three contractors at work. Three of the deaths occurred at mines in Tennessee and one in a mining accident in Spain. The corporate is taking steps to enhance security throughout its operations, Chief Govt

Jeremy Weir

mentioned in Trafigura’s annual report.

Rising costs have required commodity retailers, which depend on borrowed cash to finance their buying and selling companies, to safe extra funding. Trafigura took on an extra $6 billion in financial institution financing in its 2021 monetary 12 months, taking its whole credit score traces to $67 billion excluding these prolonged to Puma.

An extended-term uncertainty going through Trafigura and different commodity merchants is the transition away from fossil fuels. The corporate, rivals Vitol Group,

Glencore

PLC and Mercuria Vitality Group Ltd., has arrange buying and selling desks for carbon credit and electrical energy in an effort to diversify from oil, gasoline and coal.

Nonetheless, these markets accounted for a sliver of Trafigura’s revenue. In different methods the dealer is doubling down on fossil fuels, having purchased a ten% stake in Arctic oil mission Vostok Oil LLC from Russia’s

Rosneft Oil Co.

in December 2020.

Corrections & Amplifications
Trafigura trades about 6 in 100 barrels of oil consumed every day. An earlier model of this text incorrectly mentioned it traded 6 in 10. (Corrected on Dec. 8)

Write to Joe Wallace at Joe.Wallace@wsj.com