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Commodities Briefing - Categorized | Financial, Market Moves, Trading more

Capital challenge for commodities traders

Posted on 24 September 2010

From WSJ: Commodity traders have had a fine time surfing the supercycle. But despite the bullish outlook for prices, success is bringing unfamiliar problems for firms such as Glencore International, Cargill and Louis Dreyfus Commodities, including the need for much higher levels of capital to fund growth. That may force some privately owned firms to tap the public markets.
Trading is surprisingly capital intensive. Large inventories of grain, fruit or metals needed to seamlessly match buyers and sellers also tie up working capital. Investment in fixed assets, like mines and food-processing factories, also eats up capital……………………………………….Full Article: Source


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VRS - who has written 36685 posts on Opalesque Commodities Briefing.


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