The Future of Commodities Trading

Commodities Trading

When the dust settled on 2017, commodities numbers proved to be more robust than anticipated. Relying on last year’s better-than-expected performance, the World Bank predicts that global economic growth will approach 3.1 percent this year. However, the future of commodities trading remains slightly uncertain because of growing concerns over a sustainable pace in Chinese markets and what may be a short-term elevation in the global markets.

In what many experts are calling the 4th Industrial Revolution, commodities markets are changing rapidly to adjust to variations in delivery and global technology. As the markets evolve, both global economic factors and trading practices will have an impact on markets over the next five years and into the future. Tomorrow’s commodities market may look very little like the market of today. Anticipating change and preparing for a new market may be the keys to surviving what could be a difficult transition.

Keeping pace with current trends, growth, and typical economic factors is no longer enough to be successful in the commodities business. Demands are growing for traders and specialists who understand that tomorrow’s market indicators, functions, and global activities may quickly erase the traditional perceptions of commodities trading.

Preparing for Tomorrow Began Yesterday

Of all the economic markets and trading platforms, commodities trading is perhaps the most volatile. Successful traders invest time and resources in learning and following trends, activities, and global-scale economic indicators. However, in addition to the larger picture, tomorrow’s successful traders will need an in-depth and comprehensive knowledge of regional-specific growth and information. Knowing how regional trends will influence the global trading business will be especially valuable.

According to Craig Pirrong, Professor of Finance at the Bauer College of Business, University of Houston, “The scale of the trading industry will be very much determined by macroeconomic developments in emerging markets.” In places like China, where growth has been steady, but is now ebbing, there is an increased impact on commodities demands. Successful traders will understand how regional changes will direct market activities.

However, in light of the market changes, the future of commodity trading is facing an uphill challenge. The number of trading houses has fallen and active traders are on the decline. As traders leave the markets because of increased concerns after a multi-year slump, some speculative observers suggest that new opportunities will arise.

While the markets evolve, those traders who continue to develop a better understanding of emerging markets and regional impacts will likely enjoy greater potential success. Knowing how to stay abreast of rapid changes will help dedicated career traders shape the new future of commodities as short-term trends resolve over time.

Specialized Markets at the Core of Trading

At Blackhawk Partners, we rely on a traditional trading model steeped in specialized and stable markets like crude oil and derivatives, gold, and iron ore. Our traders anticipate and understand emerging markets and prepare for the technological and delivery changes in the commodities market.

The future of commodities trading may be at a crossroads, however, a solid foundation of practices and a strong grasp of the global can help point any investor in the right direction. Discover the benefits of trading with a specialist who can weather any trend and keep assets and commodities active in tomorrow’s market environment.

Written by

Ziad K Abdelnour is a Wall Street Financier, Author, Philanthropist, Activist, Lobbyist, Oil & Gas Trader & President & CEO of Blackhawk Partners, Inc.,