User:JDF2879/Trafigura/Business Activities

Activities
Trafigura is the third largest physical commodities trading group in the world behind Vitol and GlencoreXstrata, with a net turnover in 2013 of more than $133 billion.

Trafigura sources, stores, blends and transports raw materials including oil and refined petroleum products and non-ferrous metals, iron ore and coal). As the price risk is hedged through the use of natural, low-risk physical arbitrage, the profitability of the business does not depend on index price movements. what does "systematically hedged through non-speculative arbitrage" mean? Should this be included if the only source is the Prospectus? http://www.ft.com/cms/s/0/05fa5d3a-4ca9-11df-9977-00144feab49a.html looks to be a better source for this as it is an FT (the best business source) that has been written using the prospectus as a primary source. it is much better to use secondary sources like this where they exist.
 * Agree re the FT source – how about "As the price risk is hedged through low-risk arbitrage, the profitability of the business is not affected by commodity price volatility"?
 * Can you replace the prospectus with the FT then whenever possible? Ideally, as a primary source the prospectus wouldn't be used, particularly for anything about profits etc. That rewording is better but I don't see where the "profitability of the business is not affected by commodity price volatility" is sourced to. It would be better to rephrase the last three paragraphs of the FT article instead - they make what they do quite clear to me.


 * It's important info about the business model and the way the company trades, and I think just saying "The price risk is hedged through the use of natural, low-risk physical arbitrage" wouldn't make sense on its own there. This is the main point for sure, and it's supported by the FT, but I think we need the bond prospectus as well so we can include "the profitability of the business does not depend on index price movements". It's not really about profits it's more about how it makes them, i.e. it's non-speculative – it's physical arbitrage rather than a market play.

Oil trading
Oil trading is a central part of Trafigura’s activities. In the year ending 30 Sept 2013, the group traded approximately 2.4 million barrels of physical oil per day. Oil-related activities are conducted through Trafigura’s regional hub offices in Geneva, Houston, Johannesburg and Singapore and other branch offices. The group trades a range of oil products including crude oil and refined products including fuel oil, gasoline, bio diesel and liquefied natural gas. Trafigura is primarily involved in physical oil trading.

Trafigura chiefly sells to major state-owned, public and private energy companies including distributors, refiners and utilities. The majority of contracts are shorter term or on a spot basis. It is the world’s third largest independent oil trader, but this only amounts to roughly 2% of the world oil market. what is the Reuters source used for? I can't see any of this information in it
 * That's for "third largest independent oil trader" as distinct from third largest commodities trader (agree with your inclusion of Vitol and GlencoreXstrata at the top by the way)
 * Ok thanks I've moved the ref and reworded it. This looks fine to me now.

Other commodities
Trade in non-ferrous and bulk commodities – mainly copper, lead and zinc concentrate, alumina, refined metals of copper, lead, zinc and aluminium as well as the iron ore and coal trading books – made up 15% of Trafigura’s overall trading turnover in 2013. The group traded 32.9 million metric tons of non-ferrous and bulk commodities during 2013. As with its oil trading, Trafigura engaged in both physical and derivative trading of these commodities.

Trafigura’s customers include mining companies, smelters and refined metals retailers, and the group has seen growth across all its non-ferrous and bulk trading operations largely due to rising consumption in emerging Asian markets. Roughly half of Trafigura’s refined metals contracts are on a one year basis, while the remainder are spot contracts. In the ore concentrates business, around half of contracts are annual or multi-year, with the rest traded on a spot basis.

Shipping
Trafigura both owns and charters vessels for wet and dry freight operations for internal and third-party customers using a combination of time and voyage charters. In January 2013, Trafigura bought three medium range crude oil tankers to add to the existing six vessels that are operated by the joint venture company DT Group, and in May 2013 confirmed its order for up to eight medium-range product tankers. In 2013 Trafigura's fleet of chartered tonnage consisted of between 50 and 60 tankers and 30 to 40 bulkers at any given time.The trade wind source mentions the total number of vessels used at any one time
 * Time charters are for specified time periods; voyage charters are for predetermined voyages – we could link "time and voyage charters" to the article on chartering or else have "...combination of time charters (for specific time periods) and voyage charters (for specific journeys)". Re total number of vessels, yes that should be included, so perhaps: "Trafigura's fleet of chartered tonnage now includes on average between 50 and 60 tankers and 30 to 40 bulkers at any given time."
 * Thanks. Changed both of those. I'm evidently ignorant of shipping.


 * Me too, best to assume most of us are I suppose.

Subsidiaries
In support of its arbitrage-based business model, Trafigura ensures a degree of control over supply, storage and logistics through industrial subsidiaries: oil storage and distribution business Puma Energy, in which Trafigura holds an 80% interest; Impala terminals, which manages non-ferrous and bulk-commodity warehousing and logistics; the Mining Group, which manages existing mining operations and exploration; and DT Group, a logistics and trading company with investments in Southern Africa. DT Group is a 50/50 joint venture with Cochan Ltd and operates through a number of subsidiaries trading a range of commodities.


 * Defined % interest in Puma and sourced (FT).

Asset management
Trafigura is involved in paper trading through its subsidiary Galena Asset Management, which was set up in 2003 to invest in commodity funds.