Glencore trading strategies

Download the sustainability report. Our traders source a range of physical commodities, both from third-party suppliers and our own production. We also offer value-added services, including financing, processing, storage and logistics that can combine with our scale, reputation and market knowledge to make us preferred partners for many. Our customer base is highly diversified, with a high proportion of long-term commercial relationships. Our ability to arrange short- and long-term financing for customers and suppliers provides us with long-term demand for, and supply of, physical commodities.

We focus on maximising fee-like returns, taking into account our extensive global third-party supply base, our logistics, risk management and working capital financing capabilities, extensive market insight, business optionality, extensive customer base, strong market position and penetration in most commodities, as well as economies of scale.

Many of our markets are fragmented or periodically volatile.

As a result, price discrepancies often occur between the prices at which commodities can be bought or sold in different geographic locations or time periods. Other factors include freight and product quality. These pricing discrepancies can offer us arbitrage opportunities based on our ability to source, transport, blend, store or otherwise process the relevant commodities.

Marketing & logistics | Glencore

While these strategies vary from commodity to commodity, the main opportunities can be generally described as:. Disparity Pricing differences for the same product in different geographic regions, taking into account transportation or transaction costs. Execution Leverage global relationships and production, processing and logistical capabilities to source product in one location and deliver in another.

Disparity Pricing differences between blends, grades or types of commodity, taking into account processing or substitution costs.

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Execution Ensure optionality with commodity supply contracts, and look to lock-in price differentials through blending, processing or end product substitution Supply blended or processed products that attract a higher price than their base constituents.

Disparity Pricing differences for the same commodity when delivered immediately, or at a future date, taking into account storage and financing costs until future date.

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We mitigate any credit including performance risk in relation to suppliers and customers through systematically applying measures such as credit insurance, letters of credit, security arrangements, or bank and corporate guarantees.

We also leverage our network of global offices, which have direct access to, and keep close relationships with, our customers and suppliers. Our marketing teams manage market exposure to acceptably low levels by reducing price risks arising from timing differences between buying and selling commodities. We have comprehensive risk management systems and procedures in place to monitor these activities, established over the past 40 years. Similarly, we have extensive compliance policies and procedures, and use third-party screening software systems to manage compliance with sanctions and other regulations.

Physical commodity sourcing and marketing requires the highest standards in the handling and shipment of goods from supplier to customer, often including storage activities.

We offer a broad range of competitively priced value-added services that includes financing, processing, storage and logistics. Combined with our scale, reputation and market knowledge, this means we often become a preferred purchaser or supplier; it strengthens long-terms relationships with both customers and suppliers.

We have a worldwide network of storage and logistics assets in key strategic locations, included LME-accredited metal warehouses and many oil and grain storage facilities. The traffic teams that handle physical movement of goods typically account for a significant proportion of the headcount for each business segment. We are able to incorporate blending and processing activities for products that include oil distillates, metal concentrates and coal with product transport and delivery, in line with contractual quality arrangements.

Access to our shipping fleet and various freight intermediaries also provides useful information on trade flows.

Our dedicated chartering teams actively trade freight to gain market knowledge and volume benefits. Our sustainability strategy Glencore Corporate Practice Risk management HSEC assurance Materiality Our people Our approach Safety Health Workforce Society Our approach Community engagement Creating value for society Human rights Environment Our approach Environmental management Water Energy Land management Waste management Climate change Carbon disclosure Reducing emissions Helping to shape public policy Our business and climate change Planning for climate change Product stewardship Our progress KPIs Targets External commitments Reports Presentations Case studies Sustainability contacts.

Our people Job opportunities How to avoid job scams Graduate opportunities Careers at Glencore Careers video library. Arbitrage Many of our markets are fragmented or periodically volatile.

Commodity and Energy Trading and Risk Management Events - Triple Point

While these strategies vary from commodity to commodity, the main opportunities can be generally described as: Logistics, transport and storage Physical commodity sourcing and marketing requires the highest standards in the handling and shipment of goods from supplier to customer, often including storage activities.

Our capabilities We have a worldwide network of storage and logistics assets in key strategic locations, included LME-accredited metal warehouses and many oil and grain storage facilities.

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