Chief executive Mike Scott, a former managing director at trading giant Trafigura Singapore and now one of a five-strong trading team at his new firm, said there were pockets of profitable trading despite a difficult overall market. "There's been a lot of comments on the back of people complaining about the market not being good this year, but that hasn't been true in every segment of the oil market," he told Reuters in an interview.
Clearsource joins another recent Singapore start-up - Kairos Energy Trading - headed by former Shell trader Michael Ng. Several commodities firms such as the Gerald Group, Lynx Energy Trading and MRI Trading have also set up offices in Singapore in the past two years. The new firm, which started trading in March, made a turnover of $50 million in the six months to end-September and aims to boost full-year turnover this year to $500 million, Scott said.
He saw good business in gasoil, where exports from some Asian countries are heading to Europe as free-trade agreements have made them more competitive than those produced at big refineries between the two regions. The shale oil boom in the United States is also changing global trade flows, creating an increase in crude and oil product supplies in Africa and Europe that will eventually flow to demand centres in Asia.
In metals, the firm is capitalising on strong demand from China for copper ahead of expected tighter credit conditions towards year end, as local Chinese traders seek out metal to resell into the domestic market to raise cash, he said. Clearsource has also moved into financing deals, where traders obtain fixed credit facilities from banks and buy physical metal, storing it in a warehouse while selling it forward at a profit. This is currently profitable for metals such as zinc, lead and aluminium, which have been trading consistently in contango - a market structure where future prices are higher than spot.