March 2020 was a grim moment for most people. The coronavirus pandemic had spread beyond China’s borders and was rampaging through Iran, Italy, Spain, the UK and the US.
But for Glencore, the world’s largest commodity trading company, it was the opportunity of a lifetime.
Glencore’s oil traders, who operate from an office a few steps from Berkeley Square in London’s Mayfair, had recognised the deadly seriousness of the new virus earlier than most. Now, as planes were grounded and office workers told to stay at home, they sprang into action.
Because of the lockdowns, oil demand was collapsing at the fastest rate in modern history. Within a few weeks the price of oil would do the unthinkable and briefly drop below zero. Glencore whose position in the FTSE 100 means it is a constituent of most Britons’ pension funds — stepped in, buying oil that nobody else wanted and storing it on a flotilla of enormous tankers, some of them larger than the Eiffel Tower.
A few months later, with oil demand recovering, Glencore unwound the trade, delivering oil to buyers in China, South Korea and India. In some cases it had doubled its money. By the end of the year, it had registered trading profits of more than $3 billion — the best ever year for its oil traders.
Glencore wasn’t alone. Tech giants like Amazon and work-from-home up starters like Peloton may be the most obvious corporate winners from the way coronavirus has redrawn the world economy. But it’s the commodity traders who, with little fanfare, have had one the most successful pandemics.
Little known outside their industry, commodity traders play an essential role in the modern economy.