Commodity trading profits set at $95 billion baseline

Commodity trading profits reached $95 billion last year, setting a new baseline for future growth, according to Oliver Wyman LLC. This marks a decline in gross margins, which are 20% to 25% lower than in 2023. The sector experienced record profits due to market volatility following Russia's invasion of Ukraine. Trading companies have invested these earnings in assets and increased executive payouts. However, the industry now faces higher costs, with expenses rising 45% and the cost per trader up over 25% since 2019. Increased competition from various market players is also impacting profit margins.