Commodity trading margins fell over 30% in 2024. Here’s how leading traders are using digital tools and new markets to find the industry’s next growth curve.
After a period of exceptional profits, commodity trading markets are starting to normalize — and industry-wide margins are stagnating or even receding. Traders generated more than $100 billion in EBIT in 2023, but 2024 earnings show industry value pools fell by more than 30 percent year over year, with 2025 shaping up to look much the same.
During the boom years of 2022 and 2023, high volatility drove a dramatic increase in industry margins, attracting new entrants and motivating incumbents to expand their trading capabilities. As margins compressed in 2024, traders faced increased pressure and competition.
Even so, longer-term trends show trading value pools continuing to grow steadily through the end of the decade — reaching a projected $115 billion in EBIT, or roughly $200 billion in gross margin, by 2030.
Not All Commodities Are Moving the Same Direction
Energy sector value pools showed the sharpest swings in 2024. Oil and oil products fell by approximately 40 percent, continuing a sustained decline from the record-breaking highs of 2022. Power and gas commodity pools also decreased by roughly 40 percent.
LNG saw a more moderate 23 percent decline, partly because US export capacity came online more slowly than expected. Agriculture dropped nearly 25 percent as supply responded to near-record prices from 2020 to 2023 and inventories moved closer to ten-year trend levels.
Metals and mining was the exception — margins there grew nearly 20 percent, as several merchant trading companies outperformed their 2023 results even though overall prices fell.
Looking ahead, the growing liberalization of power markets, rising energy volatility from renewables adoption, and the need to optimize flexible assets mean power, gas, and LNG markets will likely drive much of the industry’s expected growth — potentially overtaking oil and oil products as the largest value pool by 2030.
Three Paths to the Next S-Curve
Global trade flows saw unprecedented volatility in 2022 and 2023, and that kind of environment is unlikely to return soon. When margins were exploding, traders could turn a profit simply by participating in the market. Now, as margins recede, traders need to run leaner and work harder — and that means increasing the value realized from core activities, expanding past those activities, and tapping into new and emerging markets.
Increasing value from core activities starts with comprehensive value chain optimization. In the petroleum value chain specifically, where refining spreads have compressed, operators that effectively optimize their downstream value chain see, on average, more than $1 per barrel in additional EBIT compared with less sophisticated players. Widespread implementation of these optimization measures could collectively add more than $30 billion a year to industry trading, refining, and downstream profits.
Alongside value chain optimization, traders are reviewing, redesigning, and reallocating their operating models — many of which grew unwieldy during the 2022-2023 boom. Opting for a leaner operating model can produce annual cost efficiencies of up to $1.5 billion across the trading industry, freeing up resources for capabilities that actually drive margin growth.
Digital capabilities are the third lever, and they’re becoming a genuine differentiator as volatility and margins decline. Commodity traders have historically been slower than other industries to digitalize, but research shows realizing these business efficiencies could eliminate more than $5 billion in costs across the industry.
The pattern is already visible in equities: quantitative funds with high rates of digital adoption post average risk-adjusted returns 27 percent higher than less data-driven, actively managed funds — and a similar performance gap is expected to emerge in commodities as digital adoption grows.
Expanding past core activities means finding new ways to originate business and secure optionality across supply and demand. Some traders are partnering with technology firms that have valuable data but lack the commercial capabilities to monetize it — particularly relevant in emerging fields like battery technology and metals recycling.
Others are building relationships with junior miners, smaller oil companies, and stand-alone asset operators that lack robust trading capabilities of their own, providing market access and financing in exchange for long-term, often discounted access to raw materials.
A third approach is “trading as a service” — offering full-service solutions from market analysis to contract execution for large industrial players and governments that want commodity market exposure without building internal trading capabilities.
Tapping into new and emerging markets is where the energy transition looms largest. The global market for energy-transition-related asset classes is expected to grow fourfold over the next decade, reaching an estimated $135 billion by 2030, driven primarily by emerging compliance and voluntary carbon markets.
These markets are also characterized by higher information asymmetry, opaque pricing, and significant regulatory uncertainty — which is exactly why they favor traders with expertise in deal structuring and navigating illiquid markets.
Guarantees of origin, known as renewable energy certificates in North America, illustrate the trajectory: trading volumes doubled from 2015 to 2021, and prices climbed from under €1 per megawatt-hour to as high as €10.
Green metals present a similar opportunity, with a global industry survey of materials buyers and sellers showing real willingness to pay premiums for green materials across commodities like lithium and nickel if they’re in deficit by 2030.
The Bottom Line
The commodity traders that thrive in this leaner environment won’t be the ones waiting for the next volatility spike. They’ll be the ones squeezing more value from what they already have, building genuinely digital operations instead of bolting on a few tools, and positioning early in markets — carbon credits, green metals, energy-transition assets — that are still forming their rules.
One thing becomes clear from the data: the next S-curve in commodity trading will be built by traders who treat performance and operational efficiency as seriously as they once treated market timing.