INDUSTRY INSIGHTSCOMMODITIES SALES & TRADING

2013 MARKET OVERVIEW & 2014 FOREC ASTS

C O N T E N T S

Commodities Sales & Trading

- 2013 Market Review_______________________________________________________________________4

- 2014 Market Forecast______________________________________________________________________5

Energy Sales & Trading

- 2013 Market Review_______________________________________________________________________6

- 2014 Market Forecast_______________________________________________________________________7

- Salary Overview___________________________________________________________________________7

Marine Fuel & Bunker Trading

- 2013 Market Review_______________________________________________________________________8

- Salary Overview___________________________________________________________________________9

- 2014 Market Forecast_______________________________________________________________________9

Base & Precious Metals

- 2013 Market Review______________________________________________________________________10

- Salary Overview__________________________________________________________________________11

- 2014 Market Forecast______________________________________________________________________11

Coal, Steel & Iron Ore

- 2013 Market Review______________________________________________________________________12

- Salary Overview__________________________________________________________________________13

- 2014 Market Forecast______________________________________________________________________13

Soft & Agricultural Commodities

- 2013 Market Review______________________________________________________________________14

- Salary Overview__________________________________________________________________________15

- 2014 Market Forecast______________________________________________________________________15

Freight, Shipping & Logistics

- 2013 Market Review______________________________________________________________________16

- Salary Overview__________________________________________________________________________18

- 2014 Market Forecast______________________________________________________________________19

Commodiies Broking

- 2013 Market Review______________________________________________________________________20

- Salary Overview__________________________________________________________________________21

- 2014 Market Forecast______________________________________________________________________21

Contact Details__________________________________________________________________________________23

C O M M O D I T I E S S A L E S & T R A D I N G 2 0 1 3 M A R K E T R E V I E W

After a year of transition in 2012, and the restructuring of many major commodities businesses, it is safe to say that 2013 has

been a turbulent period for the global commodities landscape. Whilst there had been many months of speculation regarding

the long-term commitment of some of the major banks to the market, few had anticipated the sheer number of senior

departures during the first few months of the year, following reports of plunging commodities revenues. Goldman Sachs,

Morgan Stanley and Deutsche were among those to see the most widespread losses. This trend has continued throughout

the year and almost all major banks have seen changes at management level.

These departures culminated in the shutting down, partial closure and sale of some of the most renowned and profitable

businesses in the market, most notably the physical business at JP Morgan and the near total closure of the Deutsche global

commodities business resulting in the loss of some 200 staff. As ever, with some entities withdrawing from the market, there

were others that sought to capitalise on such developments and 2013 did see a number of firms hire significantly within

the commodities market. Aside from the various hedge funds that have arisen in the spate of senior banking departures,

there has been consistent hiring throughout the year from some of the market’s other players – with Mercuria, GDF and

the Carlyle Group all seen to make hires in a number of areas. The second half of 2013 saw the emergence of BTG Pactual

as a potential future commodities power. Lead by Ricardo Leiman, the ex-Noble CEO, the Brazilian bank has hired business

heads and commercial staff across a number of markets as they look to build a global business based out of their London

headquarters. This has even included the group filing for a licence to run warehousing units – showing a clear intent to enter

the physical commodities space and bucking the general market trend for firms to limit their exposure to such a capital and

regulation intensive business.

Ultimately with implications of the Volcker Rule starting to take effect, and banks such as Deutsche and JP Morgan downsizing

their businesses in anticipation of further regulation, this has opened the door for many to capitalise on these developments

if the market is to improve in 2014. Whilst analysts have predicted banks will lose their hedging advantage to some of the

market’s major physical players there are still those positioning themselves for a further push into commodities next year –

with the main Canadian banks all planning to expand after experiencing increasing commodities revenues over the past two

years. In addition, several Chinese banks along with Wells Fargo have all been rumoured to be applying for LME membership

with a view to expanding their metals coverage in London and later expanding into other commodities.

After three consecutive years of falling commodities prices and a year

of such turmoil in the industry as a whole there are those that doubt

the market can make a significant recovery in 2014. That said, with

2014 projections indicating a healthier global economy, which should

lead to a higher level of inflation and subsequent prices of goods and

commodities, there are still those that are optimistic and are taking a

contrarian view on the market.

In terms of overall compensation there were some surprising

positives to come out of 2013. Reports early in the year indicated

that on average a member of staff at Vitol and Mercuria in London still

earns in excess of £750k, whilst recent announcements from Barclays

appears to show banks in Europe will continue to think of ways to

sidestep the recent bonus caps implemented in the continent. The

UK bank announced that they would hand additional shares to senior

staff in order to compensate them for losses they would have due to

the new regulation.

The outlook for the year in terms of hiring could well depend upon

two elements. Firstly, how the proposed sale of some of the major

commodities businesses currently in the public eye will progress. No

doubt there will be various companies looking to take advantage of

any disillusioned staff, whilst the transition of any whole team or units

to different environments will be fundamental in determining the

amount of subsequent hiring or departures from these businesses.

Secondly, market commentators will be looking closely at how the

aggressive hirers of 2013 and the various new entrants into the

market are able to perform. Whilst the start of 2013 showed many

bankers looking to establish or join hedge fund operations there

have already been signs that it is both a challenging and competitive

market to be in. Higgs Capital, ran by Neal Shear and Jean Burlot,

and Clive Capital are just two examples of commodity funds that

have shut down in recent months with a lack of capital stability and

the appetite for commodity exposure often being cited. The degree

to which this appetite returns in 2014, in anticipation of improving

market conditions, will go some way to determining the outlook for

the global commodities industry.

C O M M O D I T I E S S A L E S & T R A D I N G 2 0 1 4 M A R K E T F O R E C A S T

E N E R G Y S A L E S & T R A D I N G

2013 has been another year of considerable change amongst the traditional institutions in

energy sales and trading. Early 2013 saw mass restructuring at the majority of the top tier

banks, the year starting with Deutsche downsizing their EU power and gas business before

total closure of commodities later in the year, and more recently BAML withdrawing from

European gas & power.

The latter half of 2013 has witnessed a significant uptake in hiring and employee movement

within energy front office in the banking space. Proportionally, the majority of hiring has

been by new entrants to the market. Of particular note, BTG Pactual have been hiring in

considerable numbers across the energy spectrum. Some traditional banks continue to hire

in energy sales and trading, including Macquarie, Goldman Sachs, Soc Gen and BNP.

Due to ongoing legislation and regulatory pressure, many US banks continue to restructure

their energy business. As a result, an increase in activity and hiring has been seen amongst

funds and start ups, as senior traders look for a safer environment in which to continue

their career. Trailstone, a start up backed by Riverstone Holdings is a particular example of

a new firm which has been building a global energy trading team. It is expected that over

the coming years the commodities trading landscape will continue to change, with at least

five new entrants becoming serious market contenders. Firms from emerging markets seem

to be looking to capitalise on this shift, including Roseneft recently seen purchasing Morgan

Stanley’s oil business, Novatek hiring Arcadia’s ex-Singapore trading team, and both Gazprom

and Lukoil expanding generally across their businesses.

Regionally, hiring within the European oil market has remained fairly stable. Aside from BTG

establishing their desks, the majority of hires have been replacements or by smaller firms

bolstering their teams. However, renewed optimism has been seen within European power

& gas, with Petrochina expanding into the business, and traditional energy firms like E.ON,

Gazprom, and Freepoint hiring in trading and origination. 2013 also witnessed considerable

hiring from smaller outfits such as Scandinavian proprietary trading firms NEAS and Danske

Commodities.

In North America, 2013 was another transitional year, as some institutions and firms which

have been traditional market leaders have reduced headcount, restructured, or withdrawn

from the market altogether. However, some firms have demonstrated an appetite for US

energy such as DTE Energy, Cargill and E.ON have been seen to considerably increase

numbers within their trading businesses in Houston.

2 0 1 3 M A R K E T R E V I E W

Europe (1,000GBP)(Average)

US (1,000USD)(Average)

Asia (1,000SGD)(Average)

Desk Assistant 0-1 years experience 35-50 (43) 50-80 (70) 48-75 (59)

Associate 2-4 years experience 60-90 (73) 100-150 (117) 85-150 (109)

Vice President 5-8 years experience 100-150 (120) 150-200 (168) 150-250 (208)

Director 8-10+ years experience 150-205 (156) 200-270 (240) 250-350 (313)

As the industry continues to undergo a dramatic period of change, it is expected that the hiring which has been ubiquitous

amongst the start ups and new-entrants in 2013 will begin to slow as these businesses need to settle down and become fully

operational until further hiring can be made. It is however expected that many of those which have committed considerable

investments into taking advantage of the shifts of power within the energy market will become future market leaders, or

at least serious contenders. With JP Morgan’s commodities business(es) up for sale, and firms like Roseneft in talks to buy

Morgan Stanley’s oil business, the energy landscape is expected to have changed even further by the end of 2014.

Within the banking space, the banks which appear to be remaining committed to energy sales & trading are expected to

rebuild or bolster their teams. Barclays has been reported to be rebuilding their EMEA commodities sales team, whilst

banks like Macquarie, Soc Gen, Citi and BNP Paribas are expected to continue hiring in energy. JP Morgan have even been

seen to hire a UK Power Trader in recent weeks, showing a commitment to keeping their business fully staffed and active

throughout the sale of the business. Whilst 2013 saw some Canadian banks, such as TD Securities and CIBC, expanding in

metals, it is expected that Canadian banks will capitalise on stringent rules for US banks, and expand within European and

North American energy.

2 0 1 4 M A R K E T F O R E C A S T

S A L A RY OV E RV I E W

M A R I N E F U E L & B U N K E R T R A D I N G

The majority of commentators have noted that 2013 was another difficult year for Bunker Trading and Supply, with downward

pressure on profit margins, and reduced volumes within some regions. This has led to many firms seeking to reduce

costs by restructuring non-revenue generating business functions, relocating corporate headquarters to more tax efficient

environments, and by offering progressively high commission/lower fixed salaries to traders. Nonetheless, whilst the markets

may be proving more difficult than in past years, hiring over the past 12 months has remained strong, as trading firms and

suppliers have committed investment in pursuit of market share. Whilst many firms have looked to bolster their presence in

traditional markets, many have been seeking to develop portfolios in emerging regions and new products.

North America has seen continued hiring and investment following from the surge in 2012, as new firms to the US market

and established ones alike have looked to expand their presence, most notably International Bunkering purchased Glander

International in Florida, whilst O.W., Dan Bunkering, Praxis and Integr8 were all seen hiring in the US. Candidates with the

skill-set to build a portfolio in LATAM have been in particular demand, together with those with an established network in

US shipping markets.

The UAE, in particular Dubai, has seen consistent hiring over the past couple of years. 2013 in particular saw a number of

European senior traders, and even whole company headquarters relocate to Dubai, drawn by attractive tax rates, strategic

location & international market access, and of course climate. This was seen as Cockett Marine Oil relocated their HQ to

Dubai, whilst Dynamic Oil Trading continued their global expansion with a new branch in the Emirate, and more recently

Soyuz Bunkering, owned by the Russian Summa Group made their entrance to the market from their Dubai headquarters.

Feeling the effects of high prices of oil, many ship owners have brought bunker purchasing fully in house, taking more care

in hiring bunker managers than in previous years. 2013 has also seen the increased uptake and utilisation of derivatives

and hedging tools by owners and purchasers in order to minimise exposure to fluctuating oil prices. Some of the larger

trading houses are also recognising this demand, and have been hiring individuals with a background in risk management

and derivatives marketing, offering hedging tools and derivatives products in order to complement their traditional product

offering. KPI, Chemoil, O.W. and Global Risk Management have all remained committed to their derivative & hedging product

offerings.

2 0 1 3 M A R K E T R E V I E W

S A L A RY OV E RV I E W

Continued growth and expansion is expected in Dubai, as traders and companies alike are attracted to the United Arab

Emirates by low taxes and perceived quality of life. However, the majority of these hires will largely focus on international

markets, rather than just the Fujairah and ME region.

The Americas will also remain a focus for many international and European headquartered firms looking to increase their

coverage in non-traditional markets. Those who can speak Spanish and Portuguese will be of particular interest as firms

look to increase coverage across the Americas as a whole. However, whilst many firms are still looking to hire experienced

traders, or those with an established network, there has been little hiring at a foundation or entry level. Given that the talent

pool in the US Bunker Market is fairly thin, and the difficulties associated with visa sponsorship, firms will need to begin to

consider hiring from other verticals within shipping and oil sales, broking and marketing.

The Singapore employment market within Bunker Trading is expected to remain fairly stable. Many perceive the market to

be fairly saturated, with few plans to dramatically increase presence within the region.

Employee retention and loyalty is likely to become a more difficult challenge for some employers. A recent survey, conducted

by Selby Jennings, found that 35% of those in Sales & Trading still actively look to move between companies, despite the

perception of an unstable economy. For this reason, strict non-competes are now almost industry standard, however

candidates are becoming more prepared to relocate internationally for new positions.

Finally, global net hiring in Bunker Trading is expected to increase in 2014. Demand will predominantly be for revenue

generating candidates with established networks, however in order to sustain growth, in some regions firms will need to begin

to hire at a foundation level. Ship owners are also expected to make strategic additions to their in-house bunker teams.

2 0 1 4 M A R K E T F O R E C A S T

Europe(1,000GBP)

Asia (1,000SGD)

USA(1,000USD)

Junior Trader1-3 years experience

29-35 31-49 35-70

Experienced Trader3-7 years experience

35-71 42-84 70-100

Sales / Commercial Manager7-15 years experience

71-85 91-150 101-145

Director15+ years experience

100+ 180+ 200+

* Fixed salary only, back-to-back trading.

B A S E & P R E C I O U S M E TA L S

We experienced an active year amongst the metal industry in 2013 with the most prominent activity coming from the major

trading houses and some banking teams going through restructuring. The major push still comes from the large trading

houses that are utilising increased capital and warehousing capabilities to expand their presence in the markets.

We have witnessed increased activity with the banking sector with the likes of BAML, CBA, Macquarie, Societe Generale, and

Standard Chartered all strengthening their teams over the course of the year. Asia has delivered the demand we expected

for experienced individuals with established relationships across the region, with these becoming commodities in their own

right as the supply is so limited. Following the takeover of the LME by the Hong Kong Mercantile Exchange there has been

increased activity in the Chinese markets from London operations.

We have seen major investment banks add to their Asian metals team over the course of the year, with a handful hiring local

individuals and relocating them to London, including the likes of Societe Generale, Macquarie, and Newedge. Hong Kong is

becoming increasingly active with Standard Chartered expanding their team this year and other international banks relocating

teams to the hub to compete with the regional banks.

Canadian banks have continued to develop with RBC, TD Securities, and CIBC adding to their teams in London. Several

banks that have exited commodities have kept their precious metals operation, such as UBS, Credit Agricole and most

recently Deutsche, deciding to partner it with their established FX businesses through internal restructuring.

In 2012 we saw MRI Trading, with the backing of CWT, develop their team with the purchase of LN Metals business in order

to build out their presence across base metals to partner their expansion in the refined metals and concentrates space. In

order to achieve this rapid expansion, they hired major names from the likes of Trafigura, however we saw them make a

U-turn on these plans and pull out of the refined metal products, resulting in a number of senior departures over the course

of the year. Mercuria and Trafigura have added to their teams in Europe and Asia in order to continue their expansion in the

markets.

2 0 1 3 M A R K E T R E V I E W

S A L A RY OV E RV I E W

2013 has delivered some drastic changes in the metals industry as a whole, with some banks exiting the markets, other

considerably bolstering their teams, such as BTG Pactual, and a number of physical trading houses continuing to strengthen

their teams. It will be interesting to see the impact of these changes in the market and whether those companies that have

added to their team generate the results they anticipated. BTG is of particular interest, hiring a large number of individuals

over the last two quarters, including a recent team acquisition of ex-INTL traders and a high number of which have come

from Noble, and we wait to see if they make an immediate impact on the market and capitalise on the lower regulations

and physical capabilities.

We are also expecting to see a number of banks from emerging markets look to increase their small coverage across base

and precious, with several of the Canadian banks, in particular CIBC, RBC and TD Securities, all making moves in 2013 to

increase their presence. The number of top tier Investment Banks with metal trading teams has been diminished over the

course of the year meaning the opportunity is there for less established players to increase their activity.

Asian LME continues to develop both in Asia, but also London with major banks, as well as broking shops strengthening

their teams or entering the market. China Merchant Securities is setting up a London office in order to expand their

physical presence outside of just China and Hong Kong, showing a continued commitment from Chinese firms to seize the

opportunity to enter this potential lucrative market. This has been further illustrated by ICBC’s recent purchase of a majority

stake in Standard Bank’s London trading operation.

2 0 1 4 M A R K E T F O R E C A S T

0

50000

100000

150000

200000

300000

Difference in Basic Salary between Metals Traders at Banks and Trading Houses

250000

Basic Salary(USD)

Bank

Trading House

Junior Trader (0-3 years) Mid Level Trader (3-8 years) SeniorTrader (8 years+)

92,800

101,100

141,216

139,100

260,800

209,700

Salaries across the metals industry

have remained relatively consistent

over the year, with slight increase be-

ing noticed among some of the major

physical trading houses. Bonuses within

Investment Banks have been lower or

non-existent among some banks due

to them decreasing their efforts in the

metals markets, or shutting their com-

modities business as a whole.

Those individuals that remain in banks

are still well paid, however, we see the gap between their total compensation and those at the physical trading houses de-

crease as bonus payouts have been higher among the physical markets in 2013. Market conditions and increased regulation

means that the number of individuals looking to move from a banking environment to the physical side of the business has

increased, and as a result huge increases in salaries are not required in order for these candidated to be secured.

C OA L , S T E E L & I RO N O R E

In 2013 the main sources of activity have come from the Asian markets, where increased Chinese demand has resulted in a

significant amount of hiring in and around the APAC region. However, there have also been positive hiring trends towards the

end of this year within Switzerland and USA in particular with a number of additions being made across bulk commodities

in these regions in the second half of 2013.

C o a l

Coal has experienced a large number of APAC hires during 2013. The majority of moves in the space have been with the

trading houses, where several have looked to capitalise on the growth of the Asian markets – with notable hires coming

from Trafigura, Vitol and Arch Coal. In addition to trading houses, utilities have maintained their presence in the market with

groups such as EDF Trading and GDF Suez both increasing the size of their coal teams during 2013. This again was mostly

focused around Singapore and Asia, but some expansion has also occurred within Europe. However, whilst GDF did make

hires, they were one of several organisations to go under wider re-structuring as the industry saw a significant amount of

consolidation. On the banking side there was a little amount of hiring activity but most were either downsizing or not looking

to add. However, ANZ purchased a significant amount of the Coal trading team from Thailand’s PTT in a bid to ramp up

their exposure in the space towards the end of the year, showing that things may be looking more positive going into 2014.

One of the most significant hires of the year came from BTG in London who brought in veteran Jan-Erik Back to head up

their commodities development in the European markets alongside Simon Rabone on Coal and Iron Ore and showing

consistency with the market trends for the year.

S t e e l

Steel generally has seen a downturn in fortune over 2013 with significant losses across Europe affecting major players such

as Stemcor who have seen a large number of departures as their EU business has struggled to maintain profitability. As a

result of this, there have been others looking to capitalise on the void left by the larger players downsizing, and bringing in

talent in a bid to increase their market share. The start of 2013 saw a number of US Steel companies looking to develop

their LATAM exposure. However, we have seen a gradual shift in focus with companies reverting towards North American

markets towards the end of this year. It is looking most likely that the long products side will see the most activity going into

2014, will a selection of trading houses looking to develop their team in London and USA.

I r o n O r e

The mining industry in particular saw low returns for investors and a number of high-level departures across some of the

largest players, creating some uncertainty within the space.On the producer side, Rio Tinto, BHP Billiton and Anglo American

all elected new chief executives (Sam Walsh, Andrew Mackenzie and Mark Cutifani respectively) in 2013 all unveiling plans

to develop their businesses in 2014. One of the main talking points within the banking area was Deutsche announcing that it

was pulling out of the commodities space and reducing almost all of their commodity operations, starting with the departure

of two iron ore swaps traders across Singapore and London. New entrants, such as BTG and Caravel, both under ex-Noble

Group management, look set to fill this gap in the market.

2 0 1 3 M A R K E T R E V I E W

On the whole, bulk commodities have had a difficult year with many major players

experiencing downsizing or withdrawal from the area all together. However, the

initial predictions for bulk commodities in 2014 are positive with large export

companies expected to have a strong year of production with increasing prices,

with BHP recenly announcing record production of iron ore and coal in the

second half of 2013. With that in mind, it is looking likely that the performance of

bulk commodities relative to 2013 will see a significant improvement and more

widespread expansion across Asia – as indicated in the recent hire of Matt Brock

at Noble to build their iron ore and steel derivative business.

Overall one of the major talking points will be the Glencore/Xstrata merger

and it will be interesting to see the impact that this has on their structure and

performance going into 2014. It looks likely that a number of individuals will be

leaving the group from a senior level, creating a more candidate saturated market

for the inevitable market movements that will occur early next year.

Within coal we expect to see increased demand and activity for Mettalurgical

coal, with globalCOAL set to release a new standardised contract in the coming

months.

On the steel side we are expecting to see progression within the USA and it is

likely that initial interest in LATAM markets may not be the primary target for this

with some of the larger players looking to develop their domestic markets first.

2 0 1 4 M A R K E T F O R E C A S T

S A L A RY OV E RV I E W

0

100

150

200

250

350

300

50

000’sUSD

EUROPE ASIA USA

Junior Level Mid Level Senior Level

Basic Bonus

S O F T & AG R I C U LT U R A L C O M M O D I T I E S

A number of considerable changes have occurred over the course of 2013 among the agricultural markets, with a number

of Investment Banks pulling out of the sector, whilst mergers, acquisitions and restructuring has occurred among the physical

trading houses in a bid to strengthen their market presence and share.

APAC has seen several movements in the edible oils sector, most notably with Golden Agri hiring a number of Cargill’s palm

oil trading team whilst Viterra restuctured following the acquisition by Glencore with a number of their former team joining

Vitol who have increased their presence in the agricultural markets to compete with the likes of Gunvor and Mercuria. Noble

have lost a number of their team to BTG Pactual, like in many other markets.

Cocoa and Coffee have seen a relatively quiet year in terms of individuals moving, however we have seen some major

acquisitions in the form of Cargill buying ADM’s cocoa trading team and ECOM recently acquiring Armajaro’s trading unit

to bolster their dominance in the markets. Louis Dreyfus have strengthened their team in Africa and have plans to develop

across WAF. Cotton experienced little movement, as in 2012, but we saw Olam go through some restructuring as well as

ECOM developing their team in Asia. RCMA hired Nick Hungate from Deutsche bank to develop a cotton trading unit for

the company.

There has been a substantial amount of activity in the global sugar markets, both in established players, but particularly from

a number of new firms looking to establish their presence in the space. Following the hire of Terry Sparling last year, ETG

have continued to increase their presence in the markets by hiring in Europe and Asia. Cargill went through some major

restructuring earlier in the year with a number of departures that have gone on to join the likes of Bunge and Louis Dreyfus.

Olam have lost a handful of their team, particularly in South America, and are going in to 2014 with plans to develop in that

region among others. ECOM hired Clovis Junquiera in 2012 to build their sugar business and have subsequently hired in Asia,

South America, and are looking to develop in EMEA going in to 2014. Czarnikow have developed their business in Europe, as

well as China and Singapore with hires from some of the other major trading houses, such as ED&F and Bunge. Wilmar have

slowly been developing their business in Asia and are rumoured to be looking at increasing their presence across Europe

and the Middle-East

Hiring within the banking environment and among hedge-funds has been very limited. Banks such as Morgan Stanley, Deutsche,

and JP Morgan have decided to pull out of agricultural commodities completely, with Deutsche recently announcing their

move out of commodities as a whole. The decrease in demand for derivatives traders at banks has meant a handful of

trading houses have seized the opportunity to develop this part of their business, whilst supporting it with their major

physical presence, such as Invenio, the fund arm of Olam. Some of the limited hiring has occurred in Singapore with Citi and

Macquarie strengthening their teams over the course of the year.

2 0 1 3 M A R K E T R E V I E W

S A L A RY OV E RV I E W

Europe(1,000GBP)

Asia (1,000SGD)

USA(1,000USD)

Junior Trader1-3 years experience

45-55 70-135 50-110

Intermediate Trader3-6 years experience

85-135 135-195 110-250

Senior Trader7-11 years experience

130-190 195-275 250-350

Head of Desk11+ years experience

190-230 275-320 350-420

In 2014 we expect the decrease in activity among Investment Banks to continue and would not be surprised if one or two

others decided to pull out of soft and agricultural commodities completely due to increased regulations and smaller volumes

among the derivative markets. It is going to be interesting to see the results of the acquisitions among some of the major

trading houses and if their market dominance increases as expected. Many of the established trading houses will be keen to

see the continued growth of some of the markets newer trading ventures as this brings new revenue opportunities with it.

No doubt a number of the large multi-product soft commodity and agricultural houses will look to develop and capitalize on

growth in expanding products as we have seen this year with companies entering the cotton, sugar, and edible oil markets.

The Black Sea region has seen increased demand over 2013 with a number of major houses developing their offices in

Ukraine, Russia and across the Danube and we anticipate this region to continue developing in 2014.

South America and LATAM are expected to be an active region with the back end of 2013 delivering market movements

from the likes of BTG Pactual. Physical trading houses with existing operations in the region have made plans to develop their

teams, whilst those with no physical presence have been seen weighing up the benefits of opening new offices.

2 0 1 4 M A R K E T F O R E C A S T

F R E I G H T, S H I P P I N G & L O G I S T I C S

Whilst both dry and wet markets continue to go through periods

where confidence in the markets has not yet fully restored, in 2013

we have seen the owners, operators and trading houses who have

weathered the storm better than others looking to grow their

personnel.

A PAC

Despite increasing regulation and doubts about expatriate salaries,

Singapore remained a growing and highly competitive market in

2013. Operations staff with 3-7 years experience and permanent

residency status was the biggest area of demand with almost all the

major European owners in the region expressing a keen interest

in this kind of profile at various periods throughout the year.

Chartering Managers with a similar level of experience have also

been in high demand. This is due to the fact that firms are looking

to strengthen their teams with individuals that are still ambitious

and malleable within new company cultures and practices rather

than more experienced, expensive and senior individuals.

Within the APAC region, Hong Kong is also an increasing presence

as a secondary hub to Singapore with companies like Wah Kwong,

Pacific Basin, Noble, Caravel Group and Asia Maritime Pacific

bringing talent but also increasing the competitiveness of the

domestic markets. The increased shipping presence in Hong Kong

in 2013 is ending the regions previous perception as something of

a haven from the musical chairs of the Singapore shipping market.

A few of the moves of note this year have been Feng Zhu, the ex

Morgan Stanley Cape Trader, going to run Peabody’s Pacific freight

desk after more than a year out of the market, Adam Lucas leaving

Western Bulk to join Andy Kidd’s Swire Bulk Singapore desk, Harry

Banga’s newly formed Caravel Group taking several further Noble

chartering members. This was a further hit to the company after

losing staff previously to Mudit Paliwall’s Panacore in recent times.

2 0 1 3 M A R K E T R E V I E W

E M E A

In Europe the recruitment market has recovered slower than

Singapore from the difficulties of 2011 and 2012. Trading houses

have not actively sought to expand in 2013 and have largely

picked up talent more when it has come on the market rather

than aggressively poaching from competitors. A good example

of this was Alessandro Mortola heading to Noble and Cedric

Lopresti joining Louis Dreyfus after Gavilon closed their freight

book. Overall the market in Geneva still proves to be the most

competitive in Europe in terms of talent as freight trader’s swap

between the major houses mainly for personal reasons beyond

any broader market related issues.

London, although a smaller market, is developing on the owning

side of things as this year we have seen both China Navigation

Company and AMP establishing offices with Duncan Campbell

and Peter Cottell respectively. In 2014 this should lead to further

competition in the market and we anticipate it predicating

expansion of the talent pool in London with traders based on the

continent looking to make a move to London as an alternative

location to Geneva or Zurich. Another noteworthy element of

the European freight market this year is the prevalence of the

Utilities companies such as RWE, EON and Vattenfall as well as

others looking to strengthen their freight desks. All have added to

their freight trading teams in the latter part of this year. For these

companies location has made it difficult to attract the right talent

away from the major trading hubs of Geneva and London.

Finally this year we have seen most of the investment banks that

entered the market in the 2000s pulling out of freight both on

physical and derivatives. This has created a surplus of freight

bankers within the candidate pool that largely fall in to two

categories; firstly freight traders that had been attracted from

owners and trading houses by big pay packages during the mid to

late 2000s, secondly the more junior individuals who have been

trained within the banks who are primarily derivatives focused.

Of the two groups of candidates we are seeing a lot less interest

in the market for the more senior individuals whilst the less

experienced individuals’ move to broking or owning roles with

others changing product completely.

S A L A RY OV E RV I E W

U S A

The US continues to be a largely insulated and unique market as we see most multinationals relocating staff into the country

for fixed periods. However, demand for individuals with green cards or fixed residency in the US remains, as multinationals

look to hire local leaders to provide more consistent solutions to the temporary and expensive expatriates. We have seen

chartering managers with 5-10 years experience and residency in the USA in particular demand this year. A couple of the

major moves in the US this year have been Mat Halsall’s departure from Louis Dreyfus to BTG Pactual’s expanding physical

commodities business in September, Thomas Persico’s move to Louis Dreyfus in April from MT maritime, which showed the

appetite of trading houses in the US to look at relatively junior individuals from owning backgrounds and Joesph Gross’ recent

move from Maersk Broker to D’amico’s mid size American office. We would also expect to see Noble seeking to replace

Michael Beresford, who is widely believed to be joining Harry Banga’s Caravel Group.

Europe(1,000GBP)

USA (1,000USD)

Asia(1,000SGD)

Junior1-3 years experience

25-45+25-30%

30-55+25-30%

45-80+25-30%

Charterer3-5 years experience

70-110+40-50%

75-120+40-50%

100-150+40-50%

Chartering Manager5-10 years experience

125-165+50-80%

180-200+50-80%

180-220+50-80%

Chartering Director10+ years experience

180-230+75-100%

200-300+75-100%

250-350+75-100%

We are foreseeing a large amount of

movement in the shipping and freight

space in 2014. We anticipate most of

the traditional brokerages looking to

expand their desks particularly on the

larger panamax and capsizes.

Regionally, the major growth areas are

likely to be the US, Singapore and also

Greece which are three regions where

we have seen increasing amount of

demand particularly for local brokers.

In the owning and trading house space

we are forecasting a continuation of the

reluctance to expand on desks where

traders are managing their own PnL

and freight books.

However, in the operators who had

weathered the bad years better than

others, for example Ultrabulk, Pacific

Basin and Oldendorff to name a few,

we are expecting to see expansion and

a real competition for talent. This will

be particularly the case in developing

regions such as the Middle East, India

and Chile.

2 0 1 4 M A R K E T F O R E C A S T

C O M M O D I T I E S B RO K I N G

With increasing regulations to the broking space on a global basis, and the decision by a number of investment banks to

downsize their activities in the market, broking volumes have inevitably contracted during 2013. This has led to a number of

markets being considerably over brokered, resulting in not only lower volumes, but considerably less of the substantial pay

outs that have been seen in the industry in recent years.

Within energy, Marex Spectron have continued their impressive growth since their 2011 merger, most notably making a

number of hires to their Asian business. More recently, Newedge re-hired Eric Shi to run their Asian business, perhaps

answering the questions about their long-term commitment to commodities after a raft of departures last year and the

resignation of John Fay this year, their currencies and commodities chief. This view was further supported by the recent

appointments of Francois Coombes and Franck Borgel as co-global heads. In London there was less activity, with Evolution

looking to diversify into other energies away from their traditional environmental coverage. Meanwhile BGC announced the

shut down of their oil and products business.

Across a number of markets there has been considerable demand for strong physical brokers with established relationships.

This has been particularly seen in soft and agricultural commodities. Starsupply have maintained their status as a major player

across the European markets whilst ICAP acquired Sun Commodities in order to develop their presence and have added to

their vegoil and sugar teams. We have also seen Tradition set up a desk led by Tom Warwick, formally of JB Drax.

Within shipping it is has been a positive year for brokerages in terms of personnel expansion as we have seen the competition

for talent heating up as business leaders become more optimistic ahead of perceived improvements in the market for 2014.

This was further evident by Clarkson’s posting full-year results that outperformed market forecasts, with an exceptional

performance from its S&P business.

The general negativity surrounding the market aside there has been some positive news and a number of firms looking

to establish themselves. New entrants in 2013 included Griffin Markets, founded by a management team with a wealth of

experience in the European energy markets. The capital markets division of ED&F Man, the large physical commodities trader,

has also looked to develop a brokerage business this year in an attempt to take advantage of their substantial balance sheet

and other offerings across the commodities space.

2 0 1 3 M A R K E T R E V I E W

S A L A RY OV E RV I E W

Overall we expect the level of hiring in the broking space to stabilise in 2014, as firms adjust to new regulations and look to

focus on their core businesses.

Regionally, we expect further expansion across Asia as volumes continue to increase and the market matures as a whole.

Towards the end of 2013 we have seen a number of investment banks still look to hire and bring across strong Asian talent,

notably Mandarin speaking salespeople, in anticipation of greater client demand in 2014. Furthermore, several Chinese

institutions, most recently the established mainland brokerage China Merchants Securities, have looked to establish European

offices to service their Asian client base. Most of these set ups are looking to start in the LME and metals market before

diversifying into energies and other commodities. It is likely there could be some interest in taking one of the various teams

currently looking to exit the business – with the JP Morgan metals futures brokerage business rumoured to be available in

addition to their overall physical commodities portfolio.

In terms of product focus 2013 saw a continued interest and multiple hires in the biofuels and biomass markets. Although

volumes remain low it is anticipated this market will improve as trading houses look to satisfy industry demands for offerings

in sustainable and renewable energies. It is also anticipated there will be increased activity in shipping and bulk commodities,

with the dry bulk market in particular showing activity at present after a series of recent hires and new trading businesses

commencing trading.

Ultimately, the fate of the commodities broking scene in 2014 is likely to depend greatly on the general appetite within the

major financial institutions and trading houses for increased exposure to commodities. Although 2013 has been a challenging

year for many, with the overall economic forecast for 2014 looking more promising there is hope that both investment and

trading volumes in commodities could be set for a more positive period.

2 0 1 4 M A R K E T F O R E C A S T

Basic salaries in the broking space have on the whole decreased slightly across Europe and the US in 2013, with an increasing

amount of brokerages looking to pay lower basic salaries and higher percentage commission to brokers with genuine

relationships and books of business. In the US we have increasingly seen brokers employed on a commission only basis.

Asia has been the main exception to the summary above, where significant basic salaries have frequently been seen at the

senior level across most markets, particularly in the shipping space. This can be put down to increasing demand and volumes

in the Asian market combined with a limited pool of candidates with the combination of required language skills, genuine

commercial experience and transferrable relationships.

C O N TAC T D E TA I L S

Jake White James Warnaby

Associate Director Principal Consultant – Metals & Agriculture

Jake.White@selbyjennings.com James.Warnaby@selbyjennings.com

+44 (0) 207 019 4150 +44 (0) 207 019 4121

Arron York Joe McGrath

Consultant – Oil and Energy Principal Consultant – Continental Europe

Arron.York@selbyjennings.com Joe.Mcgrath@SJ.PhaidonSchweiz.ch

+44 (0) 207 019 4126 +41 44 208 3770

Christian Elsden Adrian Osula

Consultant – Metals and Bulk Commodities Managing Consultant – APAC Commodities

Christian.Elsden@selbyjennings.com Adrian.Osula@selbyjennings.com

+44 (0) 207 019 4176 +65 6589 4400

Conor Shaw Ling Kong

Consultant – Freight, Shipping & Logistics Consultant

Conor.Shaw@selbyjennings.com Ling.Kong@selbyjennings.com

+44 (0) 207 019 4142 +44 (0) 207 019 4161

Hannah Welch George Aplin

Consultant – Metals & Agriculture Consultant – Oil & Energy

Hannah.Welch@selbyjennings.com George.Aplin@selbyjennings.com

+44 (0) 207 019 4173 +44 (0) 207 019 4198

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