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Global commodities trader Trafigura has warned “turbulence” in the market would extend into the second half of the year as geopolitical uncertainty, higher tariffs and inflationary pressures take their toll on the industry.
The trading houses that move raw materials around the world have responded to the whiplash of US policy pronouncements and sudden changes to proposed trade tariffs, which have triggered huge flows of commodities into the US.
Chief executive Richard Holtum this year said he was “semi-seriously” considering changing the working hours of its Switzerland-based traders to 2pm to midnight, to better deal with President Donald Trump’s frequent social media posts.
Despite the uncertainty, Trafigura reported net profit of $1.5bn in the six months to March, on par with the same period a year earlier, in its first-half results published on Thursday.
The company also paid out a $1.5bn dividend to its 1,400 employee shareholders in the period, an increase from $650mn paid out during the same period a year earlier.
Trafigura’s profits — like those of other trading houses — have declined from the record highs made during the energy crisis of 2022 and 2023, but remain elevated compared with historic norms.
The outlook for the remainder of the financial year was less rosy, according to the company’s executives.
“The word of the second semester is ‘uncertainty’,” chief financial officer Stephan Jansma said in a video published on Thursday. “Uncertainty in terms of commodity prices, interest rates, tariffs.”
“We anticipate further market turbulence in the second half of the year,” he wrote in the earnings report.
Unlike in traditional supply-demand market disruptions — normally an environment in which commodity traders thrive — the current market movements are driven by policy decisions and are much harder for traders to anticipate.
“Increased volatility may not necessarily translate into physical trading opportunities,” Jansma wrote, adding the company was “well placed” to deal with the uncertainty.
Trafigura’s chief economist Saad Rahim was more downbeat, saying “current conditions are marked by significantly higher tariff levels, rising inflationary pressures, weak consumer sentiment and spending, bond market concerns over mounting government debt [and] the risk of disorderly sell-off in the US dollar”.
“This is clearly a volatile environment and not one that supports strong commodity demand,” Rahim wrote.
Trafigura is recovering from setbacks, including a high-profile corruption trial last year, and the revelation that it faced a $1bn loss after uncovering alleged fraud in its Mongolia oil trading business.
And after a changing of the guard at the top of Trafigura the company is also making significant payouts to the departed executives. The most recent senior departure is chief risk officer Ignacio Moyano, who announced last month he was leaving.
