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Commodity finance: The bite back begins
19 May 2010
As demand picks up in certain sectors, and prices of many commodities increase – and become less volatile, what lessons have the commodity banks learned and how are they viewing the markets. Jonathan Bell asks several key bankers for their views.
Read more:
Commodity finance banks
syndicated credit facilities
trading houses
Basel III
The markets, producers and commodity banks are biting back. Agri-commodities appear more robust than ever, the energy sector is looking solid, while metals and mining still – depending on the product – have a long way to go before pre-crisis volumes return. There is certainly determination from many parties, and as they sharpen their teeth for a slice of the market, it will be interesting to see how this interest translates into new financings.
Commodity financiers are robust individuals and well-used to seeing volatility in the markets. Even though the 2009 crisis was exceptional, most are prepared to take a highly pragmatic approach to future business. Federico Turegano, global head of the natural resources and energy financing group at Société Générale, based in Paris, believes that there has not simply been a sequence of change in the sector, but: “it has been a validation of best practices”. He adds: “The crisis has...
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