Commodity Trading Houses

Merchant firms that buy, store, ship and sell physical commodities worldwide.

Overview

Trading houses such as Vitol, Trafigura, Glencore, Gunvor and Mercuria in energy and metals, and the grain merchants Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus, move physical commodities from producers to consumers, earning margins from arbitrage across location, time and quality. Many are privately held and run from Switzerland, Singapore and London, financing cargoes through bank credit lines and hedging price risk on futures exchanges. Volatility is good for business, and the energy market dislocation of 2022 brought several record profits. The industry has also drawn scrutiny, with several houses paying large penalties in corruption and market manipulation cases in recent years.