Structural Change and Impacts on CTRM

One of the trends that ComTech is advising clients around is the structural change in the industry. Today’s Reuter’s story shows that this change continues unabated as commodity volatilities and prices remain lower along with many other issues and difficulties. Over the last few years, we have seen a decrease in the number of top tier players in the industry or a reduced focus on commodity trading in the top tier led by the exit or pull back of the larger banks. However, this has not been restricted to banks – in fact, we have seen large utilities losing money restructure often creating a new business for fossil fuel assets and separating out the renewables such as EON/Uniper. The big oil and petrochemical companies have also faced reduced profitability and restructuring while the big merchants have also suffered – most notably Noble. The top tier is smaller than it was and we would argue that even the middle tier – the traditional package buying tier – has also declined in numbers. What has grown and grown quickly is the bottom tier. As traders at large firms have exited disgruntled not just by smaller bonuses, but by an increasing amount of… continue reading

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