Higher and choppy prices pushed the company to borrow billions of dollars more to fund cargoes of oil, metal and liquefied natural gas, and to make bigger down payments to exchanges. Trafigura, like other traders, relies on borrowed money to finance the commodities its ships around the world. Trafigura is owned by its partners, but bonds issued to finance its sprawling business trade publicly. The company has interests in mining, logistics and industrial-metal operations, and owns a hedge fund. It handles more than seven in every 100 barrels of oil consumed globally, along with massive volumes of metal, coal, natural gas and other commodities. Trafigura has the logistical heft and balance sheet to profit more than most.
Instead they use sprawling logistical and financial operations to eke out money from gaps in prices between regions, or at different times. Traders such as Trafigura generally don’t bet on the direction of markets. Unprecedented gains and losses in energy prices preceded the invasion, beginning with the run-up in gas and power prices in Europe and Asia last fall. Stockpiles of metal and energy are low by historical levels and will struggle to meet a sustained rebound in demand, Trafigura said in its half-year report. Many traders expect commodity prices to remain high, disrupting the global economy’s recovery from the pandemic and adding to pressure on consumers and businesses from rapid inflation. Friday’s results suggest Trafigura landed bumper profits, though the company didn’t lay out how much money was made before and after the invasion. Trafigura, led by CEO Jeremy Weir, increased its borrowing to weather recent market volatility.Ī big question among traders had been whether Trafigura would rake in money from haywire trading, or suffer as it exited parts of its Russian business and prices for Russian oil tanked.