The HC Commodities Podcast

Episode: Live Event: Navigating Uncertainty - Trends and Risks in Commodity Trade
Host: Paul Chapman, HC Group
Panelists:

• Will Tully, Head of Business Development, Brown Brothers Harriman
• Stuart Lawson, Global Head of Credit Solutions, Aon
• Matthew Chamberlain, CEO, London Metals Exchange
• Marieke Fransen, Managing Director, Head of Commodity Financing, Natixis
• Akush Potch Kanawala, Commodity Risk Director, Heineken
  Date: June 3, 2025

Overview: Navigating Uncertainty in Commodities

This live podcast event gathers leading minds across banking, trading, insurance, and end-consumer industries to dissect the rapidly shifting environment facing global commodity trade. Under the shadow of ongoing geopolitical tensions, trade tariffs, and regulatory unpredictability, the panel addresses how players across the value chain are adapting, what risks have become front of mind, and what the future might hold for cost, competition, and talent in commodities.

Key Discussion Points & Insights

I. Setting the Scene: An Industry Defined by Uncertainty

• Paul Chapman introduces the panel and frames the central theme—uncertainty. Not only is the sector volatile, but new forms and levels of uncertainty (trade wars, tariffs, rapid policy changes) are making it hard for companies to invest, plan, and adapt.
• Will Tully notes that the prevalence of "uncertainty" in earnings calls has risen dramatically, citing:

  “87% of [US business] calls included the word ‘uncertainty’ at some point… It was only 30 to 38% in the prior quarter.” (01:51)

Sources of Uncertainty:

• Ongoing trade tensions and tariffs (real and anticipated, e.g., Section 232)
• Regulatory shifts and unpredictable political decision-making
• Broader systemic trends (climate, technology, supply chain dislocations)

II. Corporate Responses: From Pre-Stocking to Strategic Flexibility

• Akush Potch Kanawala (Heineken):
  • Heineken pre-stocked US markets in advance of potential tariffs, leveraging global brewing capacity for supply flexibility.
  • Scaling US production at short notice is challenging; “It’s not a switch that you can just flick… you have to get the right bottles in… It stops you from making investments.” (03:45)
  • Long-term planning is constrained by both cyclical and sudden regulatory moves.

III. Technical vs. Fundamental Market Shifts

• Matthew Chamberlain (LME):
  • Beyond fundamentals, technical factors (arbitrages driven by expected tariffs) now move prices and trade flows.
  • Uncertainty itself can distort pricing and behaviour—even before tariffs are imposed, market actors “pre-position” assets.

  “The arbitrage between a duty paid US contract and a duty unpaid global becomes… a way of expressing a view on where those tariffs are going to end up.” (05:50)

  • Increasingly, trade flows shift in anticipation, not just reaction, fueling even more unpredictability.

IV. Risk Management & The Age of ‘Polycrisis’

• Stuart Lawson (Aon):

  • Uncertainty, volatility, and now a third layer—“unpredictability”—combine for a “perma-crisis” environment.
  • The commodity sector amplifies macro themes; business decision-making is even more complex now.
  • Credit markets and insurers are responding with “greater due diligence,” with a bifurcation emerging between those willing to continue supporting commodity trade and those moving away due to perceived risk.
  • Quote from Sir Alex Younger, former MI6:

    “This is normality. We’re going to have to get used to trading in a very complex and unpredictable trading environment.” (09:06)

• Marieke Fransen (Natixis):

  • Anticipation of tariffs is often as impactful as their actual imposition.
  • Volatility creates opportunity for trading houses, but “long-term planning is becoming much harder.”
  • Weather-driven risks are increasingly part of the uncertainty landscape, alongside geopolitics.

  “The speed of the cycle… has been much shorter term cycles and much more volatile than what we’ve been used to.” (11:00)

V. Information Velocity & “Rule by Tweet”

• Panel:
  • Algorithmic trading and real-time reactions to political statements (notably, via social media) amplify both volatility and uncertainty.
• Will Tully:

  “For some people that creates opportunity… Other people say, I’m not interested in taking on that risk. It’s too fast moving, the numbers are too large.” (14:00)

• Akush Potch Kanawala:
  • The end-user position (“permanently short”) is uniquely challenged by sudden moves.
  • Corporate hedging policies help establish boundaries in fast-moving environments.

  “Having a policy is literally your best friend… as long as you stick within those bounds, no matter what tweet comes out… it makes for a lot easier conversation with your CFO in the end.” (15:06)

VI. Insurance and Banking: Policy, Panic & Practice

• Stuart Lawson:
  • Insurers with less market knowledge risk knee-jerk decision-making driven by headlines, sometimes at the expense of true trade credit dynamics (16:46)
• Marieke Fransen:
  • Banks and corporates also see top-level management panic when markets move, but seasoned players revert to policy frameworks and see volatility as engagement opportunities.
  • Notably, physical commodity participation is expanding from financial-only to also physical-market-focused entities.

VII. Normalization & Cyclicality

• Matthew Chamberlain:
  • Over multiple time frames (intraday, monthly, through cycles), normalization tends to occur.
  • The LME’s market structure, including official physical pricing, is built to absorb and digest shocks, offering a stabilizing force as information and analysis improve as the trading day progresses.

  “By the time we do our physical market pricing at lunchtime in London, you actually often see that reversion…” (19:52)

VIII. New Entrants, Talent, and Barriers

• Matthew Chamberlain:

  • Metals trading volumes have greatly benefited from energy transition and post-pandemic ESG focus.
  • Supernormal energy sector profits are flowing into metals, new roles emerging across commodities.

• Will Tully:

  • While trading houses and hedge funds are moving into physicals, new independent entrants face tough bank compliance, financing, and experience barriers.

  “A lot of the commodity trade finance banks want to work with well established, highly capitalized trading companies… Very challenging to find a bank to do that.” (25:14)

• Marieke Fransen:

  • Trading houses have become more sophisticated, with larger capital needs, making new small players less viable.
  • The supply of experienced talent is limited; automation has eroded traditional talent pipelines.

• Akush Potch Kanawala:

  “We value the longevity of people who are in commodities and stay in commodities… There’s nothing worse… than someone new [who] promises you everything… you do one or two trades, and they’re gone.” (28:39)

IX. Consequences for Costs & Efficiency

• Paul Chapman / Panel:

  • Fragmentation of global trade, rising due diligence, environmental and geopolitical risk—all these factors suggest a structural rise in transaction costs for commodity deals.

• Will Tully:

  “The next 60 days… will determine whether there’s going to be shortages of certain products like what you saw during COVID… whether that will lead to inflation…” (31:11)

• Matthew Chamberlain:

  • The complexity is not new, but every step in the process now requires “working a little harder.”
  • Responsible sourcing and regional price adjustments have become essential layers.

X. The Cycle Question: Is This Time Different?

• Paul Chapman:

  • Are we entering another “low price/low volatility” era (as after 2014), or is the current environment structurally different?

• Akush Potch Kanawala:

  “I don’t see volatility in our space going away anytime soon… There’s big decisions in relatively few hands.” (35:44)

• Marieke Fransen:

  “Volatility… is not just going to go away… A lot of long-term, well-established relationships have been questioned.” (36:29)

• Matthew Chamberlain:

  • LME’s biggest investment is now in options—“that will probably tell you where we think the opportunities are.”

• Stuart Lawson:

  • Volatility, unpredictability, and interconnection of risks, with AI looming as a further amplifier.

• Will Tully:

  “I don’t think it’s necessarily a bad thing to have volatility either. I think it creates opportunity… It reinforces the role that people play that are specialist providers…” (38:12)

• Paul Chapman (closing reflection):

  • Future commodity cycles will diverge by sector (e.g. oil vs. metals vs. agriculture).
  • Expertise, adaptability, and trusted relationships will remain the critical differentiators.

Notable Quotes & Timestamps

| Time | Speaker | Quote | |------|---------|-------| | 01:51 | Will Tully | “87% of [US business] calls included the word ‘uncertainty’ at some point… It was only 30 to 38% in the prior quarter.” | | 05:50 | Matthew Chamberlain | “The arbitrage between a duty paid US contract and a duty unpaid global becomes… a way of expressing a view on where those tariffs are going to end up.” | | 09:06 | Stuart Lawson (quoting Sir Alex Younger) | “This is normality. We’re going to have to get used to trading in a very complex and unpredictable trading environment.” | | 11:00 | Marieke Fransen | “The speed of the cycle… has been much shorter term cycles and much more volatile than what we’ve been used to.” | | 15:06 | Akush Potch Kanawala | “Having a policy is literally your best friend… as long as you stick within those bounds, no matter what tweet comes out… it makes for a lot easier conversation with your CFO in the end.” | | 19:52 | Matthew Chamberlain | “By the time we do our physical market pricing at lunchtime in London, you actually often see that reversion…” | | 25:14 | Will Tully | “A lot of the commodity trade finance banks want to work with well established, highly capitalized trading companies… Very challenging to find a bank to do that.” | | 28:39 | Akush Potch Kanawala | “We value the longevity of people who are in commodities and stay in commodities… There’s nothing worse… than someone new [who] promises you everything… you do one or two trades, and they’re gone.” | | 31:11 | Will Tully | “The next 60 days… will determine whether there’s going to be shortages of certain products like what you saw during COVID… whether that will lead to inflation…” | | 35:44 | Akush Potch Kanawala | “I don’t see volatility in our space going away anytime soon… There’s big decisions in relatively few hands.” | | 36:29 | Marieke Fransen | “Volatility… is not just going to go away… A lot of long-term, well-established relationships have been questioned.” | | 38:12 | Will Tully | “I don’t think it’s necessarily a bad thing to have volatility either. I think it creates opportunity… It reinforces the role that people play that are specialist providers…” |

Timestamps for Important Segments

• 00:00–03:18 — Setting the scene; primary drivers of uncertainty
• 03:45–05:31 — Heineken’s navigation of global supply risk
• 05:50–08:28 — LME view: technical/fundamental impacts, tariff arbitrage
• 09:06–13:14 — Insurance & banking: adapting to ‘perma-crisis’
• 14:00–19:49 — Policy frameworks, “rule by tweet,” market normalization
• 21:12–28:39 — New entrants, changing business models, talent market
• 29:59–39:43 — Future outlook: is volatility here to stay? Panel reflections

Summary

This event exposes the deepening complexities of modern commodity trade, where volatility and unpredictability sit alongside technological shift and geopolitical fracture as defining forces. Successful market participants aren’t just managing risk—they’re fundamentally rethinking flexibility, talent, and relationships, all while working considerably harder to turn challenge into opportunity. The experts agree: this turbulent environment may well be the new normal.

For more about the HC Group and related industry insights, visit hcgroup.global.