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Trafigura reveals financial data, trading volumes

Keywords: Tags  Trafigura, nonferrous, bulk, commodities, metal, concentrates, copper, lead zinc

LONDON — Global trading house Trafigura Beheer BV traded 35 million tonnes of metal concentrates, refined metals, iron ore and coal in 2012, up 20 percent from volumes traded the prior year, the Singapore-based trading company said in the prospectus for a $500-million bond it launched earlier this month.

The company recorded net profits of $991.9 million in its financial year ended Sept. 30, down 11.2 percent from profits the previous year, according to the prospectus, which was filed with the Singapore Exchange on April 23. While profits were down in its last fiscal year, Trafigura said it has seen an upturn in profits and revenues in its first quarter ended Dec. 31.

Net profit for the period stood at $216.1 million, up 3.1 percent year on year. The company has been profitable every year since its creation in 1993 and net profits have increased 13 percent on a compound basis for the past three years, it said.

It is the first time the trading house has made detailed financial information available to the public, allowing for a measurable comparison to be made between Trafigura and Glencore International Plc, its main competitor in the metals markets.

"Trafigura considers that in the nonferrous sector it ranks as the second-largest independent trader behind Glencore, with Glencore acting increasingly as a marketer of their own captive production (including Xstrata Plc volumes)," Trafigura said.

Glencore’s revenues stood at $214 billion in 2012—up 15 percent year on year—while its underlying earnings were down 8 percent year on year to $5.94 billion.

Trafigura described Glencore’s merger with Xstrata as one that will result in a "major change" in the commodities world, as the combined company "will increasingly act as a mining corporation, with Glencore marketing its own production."

"Based on market knowledge, the group also believes that it is the second-largest independent trader of nonferrous metals and minerals in the ‘tradable market’ for copper, lead and zinc metal, with a 26-percent market share, where integrated companies have a majority share," the company said.

In the prospectus for its initial public offering, Glencore estimated that in 2010, it held 60 percent, 45 percent and 50 percent of the addressable markets for zinc, lead and copper, respectively.

Glencore’s share in the zinc market is set to decrease at the end of the year, however, as it breaks its offtake agreement for Nyrstar NV’s European commodity-grade zinc, which Trafigura and various other parties are now bidding for.

In its prospectus, Trafigura also offered accounts of its existing relationships with major suppliers and customers in the metals market, identifying Aurubis AG, Wuxi City Ling Feng Copper Co. Ltd., Korea Zinc Co. Ltd., Boliden AB and others as some of its largest customers.

Suppliers on the buy side include Alcoa Inc., BHP Billiton Plc, Corporación Nacional del Cobre (Codelco), Hindalco Industries Ltd., Kennecott Utah Copper, Mitsubishi Corp. and Rio Tinto Alcan, among others, Trafigura said. 

A version of this article was first published by AMM sister publication Metal Bulletin.

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