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Trading of Commodities and Natural Resources
MFC’s operations include the trading, principally for its own account, of commodities and natural resources. Such activities include purchasing and selling of such items. To a lesser extent, MFC also acts as a trading agent for clients. MFC conducts its trading primarily through its subsidiaries based in Vienna, Austria.
MFC’s trading activities often utilize innovative and sophisticated trading strategies and structures.
MFC currently trades with commodity and other producers who are unable to execute sales effectively because of credit or currency issues affecting them or their principal customers. Generally, MFC purchases the underlying commodity and resells it to an end buyer. As a result of MFC’s relative financial strength, ability to arrange credit (including letters of credit) and insurance, it is often able to facilitate purchases and sales of commodities with more efficient and effective execution than many producers and customers could on their own. Commodity producers and end customers often work with us to better manage their internal supply, distribution risk, and currency and capital requirements. In such trading activities, MFC tries to capture and realize various trading, financing and currency spreads. These trading activities have allowed MFC to develop ongoing relationships with commodity producers, end customers, trade financiers and insurers.
MFC has historically focused its trading activities in Europe. We believe that we have the trade, finance and insurance infrastructure necessary to support the purchase and sale of commodities and natural resources in Central and Eastern Europe and Asia. The location of MFC’s trading professionals permits us effectively to pursue trading opportunities in Europe and Asia, in particular, to participate in trade flows.
In the last few years, MFC has broadened its trading line to include non-ferrous metals, plastics, chemicals, steel and iron ore.
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