Standard Chartered Plc, which gets most of its revenue in Asia, increased its global commodity headcount by 25 percent this year and is adding more as demand expands in China, the top user of energy and copper.
The bank added 20 front-office people on a net basis, taking the total to 100, said Arun Murthy, the global head of commodities based in Singapore. The increase includes traders and sales people in oil, coal, metals and agriculture, he said in an interview. The bank may add 10 to 20 in the next six months in places such as Dubai, Shanghai and Johannesburg.
Raw materials measured by the Standard & Poor’s GSCI index increased 0.2 percent in 2012, poised for the smallest gain in four years as the European debt crisis and slow economic growth in China and the U.S. curb demand. Goldman Sachs Group Inc. forecasts a 7 percent return from commodities over the next 12 months. Trafigura Group, the third-largest independent oil trader, expects China’s economy to improve in the first half.
“China is going to be the strongest driver for our commodity business,” Murthy said yesterday. “We expect consumption of commodities to be going higher. We want to be well-positioned for that.”
A manufacturing gauge in China rose to a seven-month peak of 50.6 in November, data showed on Dec. 1, increasing evidence that growth is rebounding from a three-year low. The economy may accelerate to 8.1 percent in 2013, according to the median of analysts’ forecasts tracked by Bloomberg.
The bank is setting up a so-called wholly owned foreign enterprise in Shanghai mainly for physical metals trade in China, said Tim Wilson, global head of commodity sales who joined from JPMorgan Chase & Co. in June. The new unit will open in the first quarter, the bank said.
While the debt crisis in Europe and budget talks in the U.S. may limit gains now, the bank expects raw-material prices to advance next year, said Murthy.
“Of all commodities, gold is a good bet if you want an upside as a hedge against inflation during this economic downturn,” said Murthy. “The least bullish of the complex would be aluminum” because of oversupply, he said.
Gold climbed 8.9 percent to $1,702.49 an ounce this year and reached a record $1,921.15 in September 2011. Aluminum for three-month delivery rose 3.9 percent to $2,098.50 a metric ton.
Standard Chartered established its commodities unit in 2007. Revenue advanced 63 percent in 2011 and annual growth averaged 20 percent in the past five years, according to bank data which don’t give specific figures. The bank seeks to double revenue from the unit in the next four years, it said.
“We’re still in a growth trajectory, next year and beyond,” said Murthy.