Commodity Dealing and Brokerage in the US
Revenue is projected to decrease over the five years to 2016. Consumption of commodities surged post recession, when emerging markets, like China, returned the world economy to growth. Due to rising commodity prices, the volume of traded commodities increased rapidly, boosting industry revenue. However, slowing growth in China and sluggish growth in developed countries led most commodity prices to deteriorate by the end of 2011. As a result, many investors adjusted their positions, leading revenue to decline. While stabilizing financial markets and lower trading volumes have hindered industry growth in recent years, revenue started to recover along with commodity prices. Over the five years to 2021, the Commodity Dealing and Brokerage industry is forecast to grow more robustly. Shaky investor confidence combined with low interest rates will stoke inflationary fears, which will increase commodity-trading activity. Rising regulatory pressures will lower industry profitability and deter new entrants, while investment banks and other major players are forced to scale back proprietary trading activities.
This industry includes operators and individuals who trade commodity derivatives. Commodity derivatives, such as futures, forwards, swaps and options, are financial securities that offer returns based on the return of an underlying commodity, such as agricultural products, energy resources and foreign currency. Brokers execute buyers’ orders by arranging transactions on a commission or transaction-fee basis, while dealers buy and sell derivatives on their own accounts for profit.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.