History repeated itself, yet again! After iron, Glencore Plc is on the verge of losing its top aluminium segment traders to new competitors like Vitol Group and Mercuria Energy Group Ltd. This is the latest hint that energy firms’ return to metals is fuelling a talent war in the industry.
Image Source: Reuters
Glencore and Trafigura Group have been key players in the metal market for quite some time now. However, such moves are reminders to them that they are not exempt from rigorous competition in the ferrous and non-ferrous market. Mercuria, Vitol and Gunvor Group are staffing up and upping their team strength in aluminium, copper and iron ore departments as they strategise to engender revenues beyond the energy markets that have been immensely lucrative since Russia invaded Ukraine.
In 2024, Vitol has taken away quite a few members of Glencore’s iron ore team, while Mercuria has aggressively hired about 40 staff in metals in the past few months. The employee exits were led by Jason Kluk, Glencore’s head of nickel and ferroalloy trading, who left the company in November.
Mercuria and Vitol’s employment commenced as alumina prices surged to a record, driven by a scramble for supplies after export restrictions from leading bauxite miner Guinea. While prices have slid 16 per cent from a record high of US$805.83 per tonne in December, they still are on the higher end of the price ladder relative to aluminium prices, affecting traders who often have long-term contracts to supply alumina at prices linked to the price of aluminium.
Aluminium has historically been a prominent trading book for Glencore, fuelled by offtake agreements with Century Aluminum Co. and Russia’s United Co. Rusal International PJSC — long the market’s giant contract. In 2023, it expanded upstream with a $1.1 billion deal to buy alumina and bauxite assets in Brazil.
Glencore was for many years the clear leader in metals trading, boasting in its 2011 IPO prospectus that it handled 50 per cent or more of the ‘addressable’ markets for some metals. But more recently, Trafigura has drawn level with or surpassed it in key markets, including copper.
Glencore, Mercuria and Vitol have not yet agreed to comment on the incident.
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