Few traders are crowing these days.
Metals traders often brag that they can make money whether prices rise or fall, but few are crowing these days.
Bloomberg News reports that that’s because they’re being hit by slowing growth in China and worsening credit conditions. Trading houses including Noble Group Ltd. and Trafigura Pte Ltd. have seen a series of high-profile departures and scaled back on warehouse operations. A collapse in premiums for stockpiled aluminum, a vital source of income for many, also cut profits.
The impact has been severe: Glencore Plc reported earnings at its metals trading unit fell 50% in the first half to $444 million, before interest, taxes and other expenses. The lackluster results from trading houses are a key topic of conversation at the London Metal Exchange’s annual gathering this week, when some are calling the setback temporary due to the collapse in aluminum premiums.
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