"Commodity markets are increasingly characterised by shorter and more frequent volatility cycles. This shift is diminishing the effectiveness of traditional long-cycle "super cycle" trading models. The study highlights that flexibility, rapid capital allocation, and direct access to physical supply flows are becoming increasingly important for value creation across global markets."
"While analytics-driven AI systems are being developed to support margin expansion, more advanced "agentic AI" models are automating post-trade processing and streamlining digital workflows. Early implementations suggest that redesigning operations around agentic AI could boost efficiency in back-office and support functions by 50-60%, shorten deal execution cycles, and enable faster conversion of data into trading decisions."
"Total trading revenues across various sectors-including power and gas, metals and mining, agriculture, oil products, and liquefied natural gas (LNG)-slightly declined from $72 billion in 2024 to $69 billion in 2025. However, these revenues remain approximately double the levels seen before the pandemic, indicating a structurally higher baseline for trading activity."
Commodity trading markets are experiencing fundamental structural shifts characterized by shorter, more frequent volatility cycles that undermine traditional long-cycle super cycle trading models. Trading revenues across power, gas, metals, agriculture, oil products, and LNG declined slightly from $72 billion in 2024 to $69 billion in 2025, yet remain approximately double pre-pandemic levels. Success increasingly depends on flexibility, rapid capital allocation, and direct physical supply access. Market value concentrates among sophisticated operators as margins stabilize. Artificial intelligence plays an expanding role, with agentic AI automating post-trade processing and back-office functions, potentially improving efficiency by 50-60% and accelerating deal execution. Three structural forces drive sector transformation: accelerating volatility cycles, AI technology influence, and increased trading infrastructure investment through strategic partnerships.
#commodity-trading #market-volatility #artificial-intelligence #trading-infrastructure #market-consolidation
Read at London Business News | Londonlovesbusiness.com
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