Commodities

Overview

With a global network of sales, trading, financing and origination professionals, our clients benefit from access to a highly customer-focused team providing tailored risk management solutions and in-depth market knowledge to producer and consumer clients.

A full suite of commodity asset classes

Macquarie’s presence in the commodity markets encompasses a full suite of commodity asset classes. Our sales staff and analysts have in-depth knowledge of the markets and the linkages between the different commodities.

Energy

Metals

Agriculture

Freight

Agricultural commodities

Macquarie is the longest standing provider of trading and risk management services to agricultural producers, consumers and market participants and has been actively trading in global agricultural commodity markets for more than 20 years.

Macquarie’s agricultural commodities capabilities include:

• risk management and hedging solutions
• structured finance
• inventory finance.

Our team is represented across four continents and our people are experienced marketing, trading and structuring professionals. Our services to clients include a “one-stop-shop” for exchange traded and over the counter risk management including:

• grain (corn, wheat)
• softs (sugar, coffee, cocoa)
• soybean complex
• rapeseed / canola
• palm oil
• ethanol
• pulp and paper
• dairy products
• livestock and meat.

Macquarie combines expert knowledge, service, structuring capabilities and long-term commitment to support agricultural producers, consumers and intermediaries in major markets globally.

Agriculture online

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Energy

Macquarie is an active provider of risk management solutions across the energy value chain from production, transportation and refining to storage, utilities and end consumers. We are recognised experts in financing and trading for clients throughout Australia, Asia, North America and Europe.

We focus on tailored solutions across the energy complex and offer sales, trading and origination capabilities in physical and financial crude oil, refined products, coal, LNG, natural gas and power. Our clients include producers, refiners, airlines, utilities, shipping companies and other participants in the energy markets.

Our energy markets activities include:

Natural gas and power

Active in the US, Canada, Australia and Europe, Macquarie Energy provides:

• physical gas and power supply
• trading in financial gas and power
• management of storage and transportation portfolio
• hedging and risk management services
• complementary investment and development opportunities.

Coal

Macquarie’s coal desk combines a presence in financial and physical markets to deliver structured solutions to coal producers and consumers around the world.

Oil and oil products

We provide value by structuring and executing an array of risk management programs for clients with exposure to crude oil and refined products. Macquarie can also provide a number of strategies to manage price risk and access liquidity across the petrochemicals and plastics markets. In addition, we trade physical cargoes of crude and all refined oil products.

Energy financing

Our Metals and Energy Capital Division provides debt and equity capital for the upstream and midstream oil and gas industries. We invest at the corporate and project level by providing:

• oil and gas borrowing base revolvers
• structured and project finance
• corporate restructurings and recapitalisations
• mezzanine and subordinate debt
• convertible debt
• equity capital
• tailored commodity price risk management.

For more information on our energy financing solutions, click here.  

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Environmental Financial Products

The Environmental Financial Products team provides a wide range of financial solutions to corporate and government customers to help them manage their environmental obligations.

Macquarie’s global team of dedicated environmental market professionals are located in the major environmental centres, with offices in London, Houston, Hong Kong, Beijing and Sydney.

Environmental Financial Products provides a full suite of solutions centred on three core offerings: supply, financing and risk management.

Supply, financing and risk management

Macquarie couples its depth of experience as a top tier, global commodities trading and finance house with its environmental markets expertise. Our services include:

Access to supply: origination and secondary market supply

• strong pipeline of international emission reduction projects available for direct investment and carbon credit purchase
• Macquarie has a full-service trading desk dealing in secondary carbon credits including CERs and ERUs, as well as domestic emission allowances and renewable energy certificates.

Financing: a full range of debt and equity financing, including

• inventory financing for new and existing environmental market compliance units
• derivative financing for emissions abatement and renewable energy projects.

Environmental risk management: structured products and risk management solutions are tailored to meet each client’s specific requirements

• we provide fixed price certainty through forwards and swaps
• we offer price protection via options and collars.

Case study – primary CER origination Project key features Seller: Beijing Taiyanggong gas-fired Trigeneration Co (BEIH) Buyer: Macquarie Bank Limited Volume: 4.8 million non-guaranteed CERs delivered between 2008-2013 Certification: Documented under Certified Emission Reduction Purchase Agreement Commissioned: January 2008 Registered: February 2008 Delivering CERs: Since early 2009 Macquarie managed the delivery risk to maximise returns and ensure project completion Contracting risk minimised thanks to Macquarie’s extensive due diligence, robust transaction structure and contracting terms Counter-party performance risk mitigated through Macquarie’s physical and legal control over CER deliveries from project Performance risk managed by selecting a high-quality Chinese counterparty Project completion risk significantly reduced via strong Chinese Government support - the project is part of the Beijing Olympic infrastructure Strong and demonstrable environmental benefits achieved.

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Freight

Macquarie has provided freight derivative solutions since 2006, and provides dry freight services for clients.

Our dry freight derivative desk is the leading option market maker in the Forward Freight Agreements (FFA) market, assisting all participants in the dry bulk shipping market in their hedging needs. The team, with staff in London, Singapore and Melbourne, provide bespoke risk management solutions to ship owners, charterers, and operators across all the major vessel sizes. The desk is able to provide physical freight support to its clients and can combine its extensive knowledge across both physical and derivatives to cater for the full spectrum of client needs.

Macquarie’s clearing team is one of the leading FFA clearing providers of swaps and options on the Norwegian Options & Futures Clearing House (NOS), Singapore Exchange (SGX) and LCH.Clearnet (LCH). Our cleared FFA service provides clients with the benefits of margin netting, elimination of counterparty credit risk, and straight through processing.

We can also provide advisory services on vessel ownership, long-term hedging, shipping funds, and port infrastructure.

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Metals

Macquarie provides financing, hedging and price making to producers and consumers of precious and base metals. Our team includes industry experts, from geologists to mining engineers to metal market traders, providing expertise from mine pre-feasibility to metal trading and hedging. We have been operating continuously in metals markets since the early 1980s, giving Macquarie one of the longest track records globally in this market for a financial institution.

We provide 24-hour trading and price-making for base and precious metals and are a principal provider of liquidity globally.

We are an associate broker clearing member of the London Metal Exchange and a full member of the London Bullion Market Association.

Our clients benefit from access to our commodities research team, which is recognised internationally for its high quality and comprehensive analysis of the global metals markets.

We service our customers from our offices in Sydney, Perth, London, New York, Toronto, Vancouver and Tokyo.

Macquarie has capabilities across the metals value chain: 

Trading and hedging		Financing	Banking and price making
Industrial metals & bulks	Precious metals
Cu, Al, Zn, Ni, Pb, Sn and other base metals Swaps, forwards, options, including vanilla, Asian-style, barriers and digitals Structured/tailored products Swaps on cobalt, molybdenum, iron ore and coal	Au, Ag, Pt, Pd Spot, forwards, deliverable swaps, cash settled swaps, options, including vanilla, Asian-style, barriers and digitals Structured/tailored products	Metal and cash accounts Competitive deposit rates 24-hour market maker Primary source of liquidity Base, precious and industrial metals Foreign exchange	Performance bonds and guarantees Project finance Corporate debt Working capital facilities Acquisition facilities Mezzanine loans Convertible loans Principal equity Royalties

Base metals

We offer trading and hedging services to major participants in the base metals markets including miners, smelters, fabricators, consumers, traders and investors.

With fast professional price making in all market conditions, we offer over-the-counter hedging tailored to meet our clients’ specific metal price exposures and risk management objectives. These objectives may include underwriting a project's economic return, ensuring a budgeted metal price is achieved, securing a margin for product transformation or implementation of an investment strategy.

Gold hedging

Macquarie has been providing hedging solutions to gold producers for over two decades. We assist clients to structure and implement gold hedging strategies that fit their individual project and risk management objectives. We also assist clients to assess opportunities to restructure their hedge portfolio as their gold assets develop and as market opportunities provide.

Metals financing

We provide debt and equity capital to the metals industry globally. We target opportunities in the $US5m to $US100m range and provide both debt and equity at the corporate and project level. For more information about our metals financing solutions, click here.

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