Trafigura posts record profit as virus brings wild price swings

[LONDON] Trafigura Group racked up its strongest ever half-year profit as the commodities trading giant cashed in on wild moves in oil and metals prices caused by the pandemic.

The earnings underscore the lucrative opportunities seized by the biggest traders of energy and metals as the coronavirus upended markets worldwide. Competitors including Vitol Group and Gunvor Group have also had bumper profits as they stored commodities when prices slumped during lockdowns and sold them at higher rates later amid a rush to secure supplies as countries reopened.

Trafigura's net income surged to US$2.1 billion in the six months to March 31, an almost fourfold increase from a year earlier. Its equity jumped by more than US$2 billion to about US$10 billion.

The record result "is mainly due to the performance of our trading divisions which have shown higher trading volumes, higher margins and significantly higher gross profits," Trafigura's chief financial officer Christophe Salmon said.

It puts the company on course to top the record US$2.2 billion annual earnings of 2013, even though Mr Salmon said the performance of the first six months was unlikely to be repeated in the second half.

Trafigura is the world's second-biggest independent oil trader and largest copper merchant. Crude prices have recovered to above US$70 a barrel in New York as vaccinations accelerate around the world.

Prices had briefly plunged to unprecedented levels below zero in April last year.

Copper doubled to a record above US$10,000 a ton last month compared with a year ago.

"There has been a significant increase in demand for the commodities we trade," Mr Salmon said.

BLOOMBERG