Last Year, Global Commodity Trading Profits Reach 140 Trillion Won... Record High

Electricity and Gas Trading Profits Increase by 47%

On the 4th (local time), McKinsey revealed that the global commodity trading industry recorded an estimated revenue of $104 billion (approximately 140.3896 trillion KRW) last year.

In 2022, due to the impact of the Ukraine war, commodity prices soared, resulting in a record-breaking revenue of $99 billion (approximately 133.6401 trillion KRW), which has now been surpassed. Compared to the market revenue of $52 billion (approximately 70.1948 trillion KRW) in 2021, the industry has doubled in size over two years. McKinsey analyzed that this growth was influenced by a surge in new market entrants such as technical traders and hedge funds, as well as increased profits from power trading activities.

This tracking of commodity trading activities spans across all sectors including independent traders, banks, hedge funds, state-owned energy companies, and private energy firms like BP and Shell.

Roland Reichsteiner, a McKinsey partner, stated that while large independent traders like Vitol and Gunvor are estimated to have seen decreased profits last year, other new entrants generally grew annually, offsetting these declines.

Gunvor recorded its second-highest annual net profit of $1.25 billion (approximately 1.6884 trillion KRW) last year but set aside a contingency fund of $467 million (approximately 630.8 billion KRW) due to bribery allegations, resulting in about a 50% decrease compared to 2022. Glencore reported a 46% drop in profits compared to 2022.

Furthermore, McKinsey analyzed that the market upswing last year was driven more by increased trading volumes from traditional energy companies than by firms specializing in commodity trading, along with the entry of data-driven traders. This was due to an increase in market participants, improved liquidity, and an expanded profit pool.

In particular, profits in the power and gas trading sectors increased by 47% year-on-year. Partner Reichsteiner interpreted this as a signal of how important commodities are to the industry's future. He said, "Over time, we will see almost all commodity traders focusing on power," adding, "This is key to the decarbonization of the global energy system."

Low-carbon energies such as hydrogen and biofuels rely on gas, power, and other resources for production or transportation. Therefore, new opportunities can be created between products on exchanges.

Meanwhile, profits from oil trading decreased by 19% last year. However, oil remains the largest portion of total revenue.

This content was produced with the assistance of AI translation services.