MELBOURNE (Reuters) - Metals traders are moving jobs for the first time in years as a price recovery spills into the trading sector, and more hires are expected as brokers eye opportunities from China’s mainland exchanges opening to investors abroad.
The signs of an uptick follow a six-year industry shake-out as years of declining prices led to the exit of major traders such as Barclays and Deutsche Bank, while other operators scaled back trading desks as profits evaporated.
While broad-based hiring is still far off, new positions have emerged at LME ring dealers including CCBI Metdist, EDF Man and ICBC Standard Bank in recent months.
“There probably hasn’t been this amount of change on the jobs front in the past five years,” said Jeremy Goldwyn, a director at Hong Kong-headquartered commodities broker Bands Financial.
“Some of it is expansion, and some of it is a classic merry-go-round — when two or three people move they have to be replaced.”
Firms are looking to new areas of business, such as structured forms of lending, while broader lending opportunities are emerging as the U.S. raises interest rates, after globally low rates cut traditional lending revenue.
“When copper is trading at $7,000 rather than $3,000, the market is more buoyant and people are more buoyant,” said Andy Gooch, CEO of London-based CCBI Metdist Global Commodities
“I do see there’s opportunity in the space, and the space is less crowded than it was five years ago.”
Increased global regulation has prompted industry consolidation, while European-based firms have been distracted by the need to meet new MiFID regulations implemented at the start of this year.
“We’re coming towards the end of the (MiFID) process, so therefore we’re going to be moving into the customer building process. In that respect we are hiring,” said Gooch.
CCBI Metdist took on two brokers from Japanese-owned dealer Triland Metals, in May, Andy Silver and Nicola Hopkins. French-based ED&F Man Capital Markets earlier took on hires from INTL FCStone including Fred Demler and Keith Gwozdz to lead their metals division.
LME broker ICBC Standard, which shrunk its metals business just two years ago, is also revitalising the unit since hiring big-hitter Tim Wilson, who ran Standard Chartered’s metals business in Asia.
“Since Tim Wilson joined ICBC Standard at the start of the year, the bank has renewed its focus on building up its Asia business, which ranks as a priority region given its legacy business as well as the bank’s parentage,” said a source familiar with the matter.
Traders anticipate a more buoyant job market in Asia as metals firms and funds prepare for an expected opening of Shanghai’s copper contract to international traders and more China brokerages eye operations in Singapore.
The industry is already expanding in Singapore, where the number of firms trading metals has grown by 30 percent over 2014-2017 to more than 600 companies according to the government’s business development arm Enterprise Singapore.
Xindeco Maike, a joint venture between China state-owned enterprise Xiamen Xindeco and China commodities trader Maike Group, is setting up an office in Singapore to trade metals and raw materials, said a person familiar with the matter. The office will initially be managed out of Shanghai.
French bank Societe Generale this year relocated its base metals team to the city state from Hong Kong.
The Shanghai Futures Exchange is set to launch a Singapore office on June 5, and industry experts expect China brokerages to follow suit as they seek to build a global commodities footprint.
The city state offers large numbers of trading counterparties and opportunities for financing, and was also favoured by some Chinese companies “mainly due to the tightening Chinese government control over Hong Kong,” said a source at a Chinese firm.
Reporting by Melanie Burton; editing by Richard Pullin