The HC Commodities Podcast

Episode Title: Competing to Trade: Roland Rechtsteiner
Host: Paul Chapman (HC Group)
Guest: Roland Rechtsteiner (Partner, McKinsey, Global Head of Commodity Trading & Risk)
Release Date: January 14, 2026

Episode Overview

This episode dives deep into the dramatic changes underway in global commodity trading. Paul Chapman is joined by industry expert Roland Rechtsteiner, who outlines a compelling thesis: we have entered a "new normal" for commodity market cycles—one defined by persistently higher volatility, shifting profit pools, new entrants, and a rising premium on risk management and trading sophistication. Together, they explore the drivers, consequences, and future structure of commodity trading, and what this means for organizations and individuals seeking to thrive over the next decade.

Key Discussion Points & Insights

1. The New Normal: Resetting the Commodity Trading Profit Pool

[02:06–05:52]

• Historic Perspective:

  • Post-2009 supercycle, profits leveled at ~$30-35bn/year until 2018.
  • 2022-2023 saw extreme highs due to COVID and the Russia-Ukraine war, with annual EBITs exceeding $100bn.
  • Even as this peak has receded, the industry’s profit pool has “reset” to a higher baseline—~$70bn+, double the previous decade’s average.

• Why This Has Happened:

  • Energy transition and shifting policy drives ongoing supply/demand shocks.
  • “More volumes and participants in trading markets and through this volume increase obviously also the increase in overall margin being produced.” — Roland Rechtsteiner, [02:06]

2. Structural Shifts: Liquidity, Market Participants, and Risk

[04:39–07:56]

• New Entrants Fueling Change:

  • National Oil Companies (NOCs), mining majors, renewables, data-driven trading funds, and hedge funds are ramping up participation.
  • Volatility is amplified by underinvestment cycles (notably in oil), policy-induced shocks, and volatile energy transitions between hydrocarbons and renewables.

• Deglobalization as a Volatility Driver:

  • Geopolitical events (e.g., sanctions on Russia) have forced inefficient, more complex commodity flows, increasing the need for sophisticated risk management.
  • “We had a massive, massive fundamental global shift in terms of flows...” — Roland Rechtsteiner, [06:40]

3. Commodities Cycle Dynamics: From Decadal Swings to Frequent Spikes

[07:56–11:16]

• Recent history showed major cycles every 10 years (dot-com, financial crisis, COVID/Russia-Ukraine).

• Going forward, expect more frequent and pronounced spikes—driven by persistent geopolitical, structural, and participant changes.

• “These drivers will change more often and therefore drive more cycles and shorten cycles in terms of these peaks that we see in trading.” — Roland Rechtsteiner, [08:47]

• Illustrative Example:

  • Current models suggest oil will shift from oversupply to undersupply by 2026–2027, potentially sparking the next strong price cycle.

4. Who Are the Privileged Few?

[12:21–14:26]

• Strategics on the Rise:
  • Main profit growth so far captured by large merchant traders and hedge funds with greater risk capital and operational agility.
  • Those able to deploy “a lot of bar and working capital against market structures in a very short period of time” capture the lion’s share in volatile upswings.

5. Acceleration or Dampening: Role of State Intervention and Energy Localization

[15:51–19:23]

• Could State or Policy Prerogatives Restrain Volatility?

  • Yes, via price controls or intervention—but global interconnectedness and need for inventory optimization mean brisk trading is likely to persist.
  • “Our systems are set up in such a global way that without the global trade in the future, it will be very difficult to sustain.” — Roland Rechtsteiner, [15:51]

• Energy Transition:

  • Transitioning from hydrocarbon trade to “localized” energy (solar, nuclear, etc.) may reduce some global flows—but this is at least a decade away, and global trade in LNG, gas, and metals will remain robust.

6. The Winning Formula: Flow, Capital, Sophistication (and AI as Accelerator)

[21:15–26:00]

• Three Core Success Factors:

  1. Flow: Access to assets and asset-backed volumes.
  2. Capital: Both working and risk capital for volatile times.
  3. Sophistication: Operational scale and information edge.

• AI and Data-Driven Trading:

  • Exponential gains for those who can blend data science, predictive analytics, and physical market knowledge.
  • “Even with today's technology you can achieve like 30% cost savings in your mid back office operations once implemented. Assuming technology develops as we expect...we see these numbers going way north...” — Roland Rechtsteiner, [25:12]

• Hedge Funds and Digital Natives:

  • Hedge funds and data-centric shops rapidly scaling up, even moving into physical assets for real-time market insight.
  • Physical merchants are building out digital teams and leveraging AI to cut costs and gain speed across all operations.

7. Capital Strategies and the Role of Originators

[27:17–30:58]

• Capital Access is Critical:

  • Privately-held traders can lever up more aggressively than public firms (due to balance sheet/covenant constraints).
  • Sophisticated origination—creative supply deals, equity for offtake rights, M&A—is becoming a driver of competitive advantage.

• “The most valuable player of the future is going to be the originator...”

  • Paul Chapman, [30:58]

8. The Talent Crunch: A Window of Opportunity

[32:14–34:21]

• Limited Talent Pool:

  • Years of underinvestment and industry consolidation created a “great retirement cliff.”
  • Commodity traders, originators, and data scientists/analysts are in shortest supply now.
  • M&A and joint ventures are becoming preferred paths to acquire capability and talent quickly.

• “If you're not building out your commercial teams to capture this opportunity…you might be shut out simply by the fact that there being very limited talent…”

  • Paul Chapman, [32:49]

9. Market Structure 2036: What Does the Industry Look Like in 10 Years?

[35:24–38:14]

• Further Consolidation and Shift:

  • Expect merchant traders (e.g., Vitol, Trafigura, Mercuria, etc.), NOCs, and large producers (who have invested in sophisticated trading) to gain market share.
  • “...those are obviously the ones that can put a lot of bar and working capital against market structures in a very short period of time.” — Roland Rechtsteiner, [12:21]

• Who Loses Out?

  • Players lacking scale (flow), capital, or trading sophistication—many public companies, some power and hydrocarbon traders—will fall behind, may need to focus strategy or exit.

10. From Nice-to-Have to Must-Have: Boardroom and Investor Pressures

[39:54–44:10]

• Trading Is Now Essential:

  • Organizations must build at least basic trading and risk management capabilities if only to protect margins and gain (or retain) investor confidence.
  • “...the need for sophisticated risk management capabilities and price discovery...are just increasing. Hence the majority of the players today…need to participate in these markets.” — Roland Rechtsteiner, [40:25]

• Investor Attitude Evolving:

  • Appetite for trading profits is rising—returns are “bankable” even if quarterly results fluctuate.
  • “That has fundamentally changed over the last five years…today, whilst investors might not fully understand what trading does…they see the bankability of the returns.” — Roland Rechtsteiner, [43:13]

11. Joint Ventures and Future Participation Models

[45:13–49:22]

• How Do JV’s Work?

  • They allow producers or refiners to “buy in” expertise and culture, speeding trading business build-out.
  • Typically, a new, co-owned company is formed as trading arm for the producer; partner may eventually be bought out once skills are transferred.

• For Traders:

  • JVs are a new revenue stream and a chance to access unique regional flows.

12. Who Could Win Next? Will New Trading Houses Rise?

[49:22–52:38]

• Despite high entry barriers, surprises can happen—NOCs, mining giants, private equity, or even technology companies could still disrupt, provided they possess at least one of the core success factors: flow, capital, or sophistication.
• “You could always imagine there’s new players...The entry barriers are getting bigger...but I could certainly see a world where there is new players coming in on each of the three elements.” — Roland Rechtsteiner, [49:45]

Notable Quotes & Memorable Moments

• Roland Rechtsteiner [02:06]:
  “We basically are on a new normal now. And that new normal is more than twice as big as what we had before this super cycle of the last few years.”

• Roland Rechtsteiner [08:47]:
  “Fully agree to the thesis you’re outlining, Paul. What we see is…drivers that will continue to drive the volatility...these drivers will change more often and therefore drive more cycles and shorten cycles…”

• Paul Chapman [30:58]:
  “The most valuable player of the future is going to be the originator…”

• Roland Rechtsteiner [15:51]:
  “Our systems are set up in such a global way that without the global trade in the future, it will be very difficult to sustain.”

• Roland Rechtsteiner [25:12]:
  “Even with today's technology you can achieve like 30% cost savings in your mid back office operations once implemented…we see these numbers going way north in terms of efficiency…”

• Roland Rechtsteiner [40:25]:
  “Hence the majority of the players today…not only for additional margin, but for pure risk management purposes, need to participate in these markets.”

Timestamps for Key Segments

• The New Normal: [02:06–03:57]
• Structural Market Changes: [04:39–05:52]
• Deglobalization and Volatility: [06:40–07:56]
• Breaking the 10-Year Cycle: [07:56–11:16]
• Who Will Win? Privileged Few: [12:21–14:26]
• State Role & Energy Transition: [15:51–19:23]
• Winning Formula & Role of AI: [21:15–26:00]
• Capital Tactics & Originators: [27:17–30:58]
• The Talent Crunch: [32:14–34:21]
• Future Market Structure: [35:24–38:14]
• From Nice-to-Have to Must-Have: [39:54–44:10]
• Joint Ventures Mechanics: [45:13–49:22]
• Will New Trading Houses Rise?: [49:22–52:38]
• Consumers/OEMs as Participants: [51:53–52:38]

Conclusion

This conversation paints a vivid picture of an industry in transition, where mastering flow, capital, and trading sophistication (with AI as a force multiplier) is essential to success. The next decade promises both heightened opportunity and risk, and for those not moving now—whether building teams, systems, or capabilities—the window is closing. As trading moves from a “nice to have” to a “must have,” and volatility becomes the new baseline, the beneficiaries will be those organizations and individuals that adapt first and fastest.