The HC Commodities Podcast

A still timely discussion as the Federal Reserve comes under pressure to decrease rates... How low interest rates since the financial crisis have caused inequality, populism and inflation. Christmas re-release of one of host Paul Chapman's favorite discussions. Award-winning, financial journalist and historian Edward Chancellor join us to discuss interest rates and the impact on the commodities sector. Interest rates – the price of money and time – have been unnaturally low since the global financial crisis. This has led to a profound impact on finance and society. Global corporates found financial engineering more “profitable” than focusing on products and operations. Assets inflated and inequality widened. In the commodities world, the cost of carry and cost of finance, was essentially zero. Energy tech plays were awash in money and valuations sky high. Rates are now rising and those same engineered corporates are becoming zombies. China risks economic Armageddon as the global carry trade ends. Assets prices are falling and financially stressed commodity traders, now face higher rates. Edward argues higher rates will return the world to profitable growth and risk allocation unless political will to reverse rates wins…

The skillsets required to be in a commodity trading team have always been evolving. However, that evolution is accelerating in the wake of new technologies and especially AI. In this episode we trace the changing roles and skills traders have needed over the last century and what the future holds as AI becomes ever more involved in the day to day activities of a trading desk. What are the skillsets of the past and their future? Are they fundamentally different? How is AI already affecting teams?  And how will AI shape the teams, careers and opportunities within the sector?  Our guest is Daf Davies, long time commodity trader, and founder and CEO of Deus AI – a consulting firm focused on preparing companies for the commodity trading future.

Will nuclear fusion change the world and if so how far away is it? What is fusion power? What are the technological, regulatory and financial developments that are accelerating our path to it? What has changed that has meant private companies are now racing to develop it alongside governments? And what will it mean for fusion power to be deployed at scale. Our guest is Jay Brister, an independent investor and consultant with over 40 years experience in the nuclear sector who has focused on fusion over the last five years

Vince Beiser, an award-winning journalist and author known for his insightful works on essential resources, delves into the pressing issues of critical metals in the energy transition. He discusses the environmental and social challenges of rare earth mining, including China's market dominance and e-waste recycling complexities. The conversation touches on the 'right to repair' movement, EV battery reuse solutions, and the urgent need for sustainable practices in resource extraction. Beiser highlights innovative startups making strides in recycling while advocating for systemic change.

Matt Lanza, the Lead meteorologist at Chenier and a veteran of the energy trading sector, sheds light on the critical role of weather in energy markets. He discusses how climate change intensifies unpredictable storm patterns, making accurate forecasting more challenging. Lanza also dives into the transformative impact of AI on meteorology, emphasizing the importance of human interpretation of data. Plus, he reveals what keeps meteorologists awake at night and why energy traders rely on their expertise to navigate the complexities of weather-driven markets.

In the wake of the energy crisis and the demands of the energy transition, the EU has enacted a series of regulations, and considering more, in the European energy markets. These will bring changes to how power, carbon and gas markets operate and some proposals under consideration could have profound effects. What are these changes? What is the impact on how markets operate and the opportunity for participants?  And are we entering a period of re-regulation and intervention after the steady march of liberalization over the past 25 years? To discuss this and more is our guest Bart Verest, the Lead Partner at E&C Consultants, an international consultancy focused on energy procurement and markets with their headquarters in Belgium. Bart is an expert in energy markets and energy contracts. 

David Wilson, Senior Commodities Desk Strategist at BNP Paribas Markets 360, dives into the volatile metals markets. He explores the impact of China’s economic strategies and U.S. policies on prices across copper, aluminum, nickel, and gold. Wilson highlights the complexities in the copper market due to algorithmic trading and supply challenges. He also discusses the growing dominance of Indonesia in nickel production, shifts in battery technology preferences, and the intricate dynamics influencing gold prices amid economic uncertainty.

Join leading experts like Rob Walsh, CEO of IMI, who dives into the chaos of commodities trading, and William Tully from Brown Brothers Harriman, who shares banking insights on these turbulent markets. Sunil George discusses financing amid volatility, while Todd Lynady tackles credit and liquidity challenges. Alexandre Lacreu offers a credit insurer's view on risk management. Together, they explore the evolving landscape shaped by geopolitical tensions and global supply chain disruptions, offering valuable strategies for navigating this unpredictable terrain.

Nick Marshall, co-founder of TASC, brings 25 years of expertise in carbon markets to the forefront, discussing critical developments at COP29. The conversation covers the transformative potential of Article 6 in the Paris Agreement and its implications for emerging markets. He delves into the challenges of navigating the complexities of compliance and voluntary carbon markets, and the impact of differing regulatory approaches between the U.S. and EU. Additionally, Marshall highlights innovative carbon reduction projects, like clean cooking initiatives in South Africa, that empower local communities.

Commodities sit at the heart of global trade and as such are at the center of the rise of protectionism. After a long period of globalization and ever freer trade, there is a perceptible and growing shift back to mercantilism and protectionism. This is driven by great-power competition with the energy transition being a key driver. Tariffs, sanctions and direct market intervention are ever more commonplace. To discuss this trend, its causes and its impact on our sector is Alex Tuckett, Head of Economics at CRU, the independent commodity analytics, consulting and pricing agency.