LAUSANNE, Switzerland, March 22 (Reuters) – Executives from the world’s largest trading houses and mining companies are among those discussing market trends at the FT Commodities Global Summit in Lausanne, Switzerland, this week.
JEFF DELLAPINA, CFO OF VITOL
“It does not feel like 2007-2008. The events of last week were a bit shocking, but I think the (banking) situation has been contained,” he said, referring to the collapse of Credit Suisse and bank contagion fears.
He said niche or regional traders still have scope to grow and the metaphorical moat to expansion is drying up.
“As the West disappears from a lot of African and other specialised countries when western banking support is declining, there’s a lot more regional trading companies that have established footholds in these areas.”
“It’s a fluid market. There’s always capital available for interesting trade flows.”
“In main market activity like major LNG traffic for instance, you need big balance sheets and a lot of capital to sustain multi-year hedge positions, but for regional flows, the moat isn’t that large, it’s declining.”
JEFF WEBSTER, CFO OF GUNVOR GROUP
“Last year was an exceptional year in terms of financing… with margin calls.”
“The kaleidoscope was shaken but things are starting to settle. Europe’s ability to cover its gas needs is less uncertain than it was for this past winter.”
GUILLAUME VERMESCH, CFO OF MERCURIA
“The fundamental problems are not solved, we still have a war in Ukraine. Intrinsic volatility remains, we will certainly see peaks, and higher prices in commodities will remain in the coming months.”
“I don’t think there will be an issue for financing for those on the stage today… I’m more concerned for smaller, niche traders and SME (small and medium sized) companies in Switzerland that rely on both banks,” he said, referring to the recent collapse of Credit Suisse and two U.S. banks.
CHRISTOPHE SALMON, CFO OF TRAFIGURA
“I do not believe there is a knock-on effect on commodities from the banking crisis.”
“I believe volatility in the market in here to stay for geopolitical reasons, not just Russia but also China.”
“Last year liquidity management was a challenge. We were very well supported by our banks but we now have new lenders active in our sector, which are the export credit agencies.”
“We managed to raise close to $5 billion of competitive term funding with the support of these export agencies. This is major news for the sector because it acknowledges the key role that we play in the supply chain and the importance given by governments to ensuring the integrity of supply chains.” (Reporting by Julia Payne; Editing by Jan Harvey, Mark Potter and Emelia Sithole-Matarise)