The leader in commodity trading with no boundaries-Vitol considers the metals market due to forecasting that a peak level for global consumption of petroleum will be in the foreseeable ten years. The company’s inclination towards the metals sector was announce by its chief executive, Russell Hardy, on Thursday at the Financial Times Commodities Summit held in Singapore, where she emphasized that the oil reserves are only sustainable for a limited time in the future.
Hardy mentioned that even if the focus is still on the oil business in the short run, it is anticipated that oils demand will peak and supplant other market segments in about ten years. On the other hand, the outlook of the metals market due to the energy transition in particular will dramatically change for the better. “The electrification phase is going to drive a great deal of growth in metals,” Hardy said, mentioning steel and iron ore and those two metals’ close relative copper and aluminum as the relevant markets.
This long-term vision corresponds with the increasing involvement of other market players like Gunvor and Mercuria in metals. Among the other undertakings that have taken place recently is the assurance made by Vitol to buy Noble Resources in August, whom they describe as a trader based in Hong Kong involved mainly in oil and coal as well as a type of coke known as metallurgical coke which is sought in the manufacture of iron. Apart from that, last month the two British executives were recruited from Mercuria to strengthen the company’s senior metal trader’s office, which indicates the firm’s focus in this area.
The major reason as to why Vitol has shown a strong interest in metals is the increased need for key minerals such as copper, nickel, cobalt and lithium especially with the rising popularity of electric vehicles that rely on batteries, power grids and renewable sources of energy. For instance, it has been said that the supply of copper is likely to be limited in the near future and the International Energy Agency estimates that current and future copper mining activities will be able to satisfy only eighty percent of the global copper supply by 2030.
Nonetheless, Hardy was aware that it would take a long time and be complicated to extend the business into metals alone. “It’s a 10-year ambition,” he said, explaining that although oil and gas are central to Vitol’s operations, the company is developing in order to one day have a business with more diverse activities, metals in particular.
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