Metals brokers enjoy fat profits from Rusal chaos

Eric Onstad, Pratima Desai   LONDON (Reuters) – Surging volumes and volatility in industrial metals so far this year, largely due to U.S. sanctions slapped on Russian aluminum producer Rusal, have been a major money-spinner for several brokers and banks after years of tepid market conditions. The lurching market, however, has also created difficulties for some managing risk, while producers and consumers have struggled to lock in prices through hedging programs. Ten London Metal Exchange (LME) members who participated in a Reuters poll have seen profits improve during the first five months of this year, with an average rise of 30 percent. The results varied widely, with one reporting a single digit rise while another surged about 70 percent. “Business has been very, very good for anybody in our shoes that thrives on volatile markets. Trump talking about sanctions on Rusal was enough to really blow the market into the stratosphere,” said the head of metals at an LME broker, who declined to be named. “But anybody who’s involved in the risk side of things, the market-making side of things, would have had an incredible scary ride through April.” Volumes on the LME – the world’s largest market for industrial metals… continue reading

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