Estimated reading time: 4 minutes

The commodity world is vast. It touches all industries and all corners of the globe. The vastness of the commodity industry makes it even more important to bring the community together to network, converse, and share best practices. 

At Commodity Trading Week (CTW) in London, where the commodity community was gathered for two days, Deepesh Patel, Editorial Director, Trade Finance Global (TFG) spoke with Ben Hillary, Managing Director at Commodities People.

Stabilising volatility in commodities markets

The commodities markets have been faced with tremendous amounts of uncertainty over the last 5 years, bombarded by the effects of inflation, wars, and a global pandemic.

While this uncertainty is still rife, the last year has felt calmer than those preceding it, owing to government interventions – including tighter monetary policy and inflation-controlling measures – and also industry resilience.

Hillary said, “They’ve learned a lot of hard lessons. They’ve learned how to quickly adjust to supply chain disruption. They’ve learned to act quickly, to manage risk, and as a result, challenges that might arise now are somewhat mitigated.”

A third factor that has contributed to a relative calming of market volatility is technology. 

With advancements in emerging technologies like artificial intelligence (AI), many firms are able to leverage more robust data protocols, which provides better insights for traders and allows firms across the industry to operate more effectively.

The changing wave of CTRM and ETRM

In the past, the CTRM and ETRM space has been relatively static with few new firms entering the space. However, this is now changing.

Hillary said, “At Commodities Trading Week and some of the other events we have seen a wide range of newer CTRM and ETRM players that we hadn’t heard of a few years ago.”

In tandem with these new entrants comes a continued transition in the way that firms in the space operate. For instance, the move to Software-as-a-Service (SaaS)-based systems has continued.

Hillary said, “SaaS is very much the standard now. When we used to poll attendees in previous years, there was this perception that it might not be secure, and now it’s actually quite the opposite.”

This transition has also facilitated the development of ecosystems allowing CTRM and ETRM providers to integrate their offerings and work with different providers, such as advanced data analytics tools or AI automation offerings.

These platform ecosystems are also increasingly looking at implementing new product offerings that align with the needs of the commodity and energy trading industries.

Hillary said, “There’s a real rush across the commodity sector to get into environmental products – like renewables or carbon – and that throws up all sorts of complex technology challenges in itself.”

As these shifts in the sector and the broader economy become more entrenched, CTRM and ETRM providers are becoming more comfortable with the changes and are continuing to develop solutions that meet these needs.

Looking ahead to more Commodities People events

Commodities People – the group behind the CTW conferences – understands that when it comes to commodities markets, knowing what is happening today is not enough; an effective programme must explore what is likely to be happening in the future. 

With a constant eye on the future, understanding what they are planning for upcoming events can provide a sense of the direction that the industry may be heading.

Hillary said, “We are working to create a gathering point for the global multi-commodity industry, particularly around all things tech, risk, and trading strategies and we’re going to be giving more focus to trade execution as a whole.” 

The organiser’s trial with a more differentiated focus on derivatives and hedging has met with great success at its roll-out for events in the US and they are continuing to explore the best way to optimise attendee information absorption at the events. 

Hillary said, “There’s a lot more appetite for more interactive deep dive workshop-type sessions. So you can expect more of that. And we’re also toying with having an opening party, but I can’t confirm that yet.” 

Opening party or not, these are events that you won’t want to miss.