Trafigura warns about volatility in 2025 after first-half profits inch up

Commodities traders may struggle to capitalize on supply and demand disruptions rather than market volatility driven by politics in 2025. This was revealed on Thursday by trading house Trafigura, which reported a slight increase in its first-half net profits.

The Swiss unlisted trading house reported an increase of 3% in net profit for the six-month period ending March 31. This stabilised after a steep drop in the 2024 full-year result, when the company found a $1.1billion fraud in Mongolia.

Trafigura and its rivals Vitol, Gunvor and Gunvor also saw their profits fall in 2024, as the post pandemic recovery, and commodity price shocks, following Russia's invasion in Ukraine, faded. This ended a boom for commodities from 2022-2023.

The start of the first half of Trafigura's 2025 financial period coincided with President Trump's second tenure, whose foreign and trade policies have caused global markets to be in turmoil. Trafigura has a cautious approach to the market volatility that is expected in 2025.

Trafigura's Chief Financial Officer Stephan Jansma stated that "increased volatility" may not translate into actual trading opportunities as the current market movement is driven by policy decisions, rather than the traditional disruptions of supply and demand. He also predicted that the turbulence will continue throughout the second half year.

Saad Rahim said that the environment was volatile and did not support a strong demand for commodities.

Richard Holtum was appointed as the new Trafigura CEO.

Jeremy Weir will be replaced by him on January 1.

Holtum stated that the company serves as "a shock absorber for volatility in global supply chain."

REVENUES ON OIL & GAS DOWN

The firm reported that the first-half revenue fell 4% due to lower commodity costs, to $119.2 Billion. Oil and gas volumes were unchanged from the previous year, at approximately 7.2 Million barrels per day.

Trafigura sold 9.9 million tons of nonferrous metals in comparison to 10.4 millions during the same period last. The company cited a focus on "profitable tonnes." Bulk mineral volumes dropped to 43.4 millions tons, down from 54.7 million tons in the first half 2024.

Dividends of $1.537 billion were announced by the company for this period. This was primarily due to redemptions of shares.

(source: Reuters)