Mimi Chahal: New Commodities Trading Skillsets

The role of a "commodities trader" has become increasingly fluid, masking significant variations in required skills and competencies across different organisational models. While traditional roles were once clearly defined, today's reality is more complex, writes the Director of HC Talent Intelligence, Mimi Chahal. Read her editorial in HC Group's Annual Market Review 2024-25.

Take two crude oil traders with identical job titles. At an energy major, success might require combining traditional physical trading expertise with financial structuring capabilities. Meanwhile, at a quantitative focused hedge fund, the emphasis may be entirely on statistical modelling skills and automated trading strategies, with physical market knowledge serving primarily as context.

New Trading Skills

Using talent data across 40 leading commodity trading organisations, HC Group’s Talent Intelligence team has uncovered significant patterns in the changing skill requirements of modern day traders. Quantitative capabilities are showing the strongest growth, with quantitative trading expertise increasing by 14%, closely followed by analytical skills at almost the same rate. 

This reflects the industry's increasing reliance on data driven decision making and systematic trading approaches. Traditional trading competencies aren't being displaced: they're evolving. Financial economics (13.5% growth) and valuation skills (11.5% growth) remain crucial. Physical trading expertise is also gaining importance, evidenced by significant growth in freight forwarding (11.3%) and supply chain optimisation capabilities (9.2%).

The TradeTech Revolution

The rise of algorithmic trading and artificial intelligence has automated many lower-value tasks that were once essential for building market knowledge. With AI now handling data collection and cleaning, traders no longer need to manually sift through information - allowing for quicker and more accurate insights. This technological shift has redefined the trader's role. While the ability to analyse markets remains important, the emphasis has shifted toward interpreting AI outputs and thinking strategically about market context, as well as adding a crucial human lens.

Organisational Culture and Success Factors

These differences extend beyond technical capabilities. Each organisation's trading approach is fundamentally shaped by its culture, risk appetite and purpose. A trading house seeking to maximise proprietary profits will have a markedly different view on market engagement than a major seeking to optimise its asset base or a bank focused on client flow business. Understanding an organisation's edge - whether that's superior market knowledge, stronger client relationships, better assets, or more sophisticated quantitative capabilities - is crucial. This edge often determines not just what type of trader will succeed, but how trading teams are structured and incentivised.

The Future of Trading Talent

For talent acquisition, this complexity demands a sophisticated understanding of organisational nuances. A successful trader in one environment may struggle in another, not due to capability gaps, but because different organisations prioritise different aspects of this evolving skill set. Some demand Python programming and machine learning experience, while others prioritise expertise in physical operations and fundamentals. Even traders with the right technical skillset may struggle to adapt to different organisational approaches to risk, decision-making and performance measurement. 

As the industry continues to evolve, the most successful traders will be those who can adapt to new technologies whilst maintaining strong fundamentals in traditional trading skills. The future belongs to those who can effectively combine human expertise with technological capabilities, all while maintaining the relationships and market understanding that have always been at the heart of successful trading.

Mimi Chahal

Director, HC Talent Intelligence