Commodities Trading
Commodities trading is a practice that has been a fundamental part of society since the beginning of modern history. The desire to trade has led to ever increasing advances in the technologies that facilitate trade. Many of the modern advances in farming, mining, and animal breeding owe some of their best techniques to the fact that there was a demand for these goods and someone who was willing to arrange to trade them. While the world’s techniques for trading have become sophisticated there are additional efficiencies to be gained. Increase demand around the world for food, energy, and technical manufacturing will necessitate that the techniques used to produce, refine, store and transport many of the world’s commodities will need to grow even more sophisticated to meet this growing demand. Taurino Capital seeks out supply-demand imbalances in the commodities markets and seeks to take part in bringing price equilibrium to these markets. More than just a profit motive, Taurino Capital also seeks to promote the latest in sustainable technologies in the field of commodities to ensure that generations to come will also have the opportunity to learn, grow, and optimize for the benefit of humanity.
Our Approach
Our commodities trading operations spans the supply chain from raw commodities production to end user marketing. We seek to trade in commodities that have a steady demand and long term use cases, typically in technical manufacturing. By investing into the commodities sector we seek to make a profit as well as understand how world markets might be affected by the ebb and flow of certain valuable goods. Understanding the markets for commodities increases our knowledge as investors in other on-going businesses, as all product start off as commodities. While the commodities sector can be more volatile than other asset classes, the rewards can off-set the associated risks. The commodities sector consists of a series of sub-businesses, each with its own unique set of opportunities and challenges. By approaching the commodities sector as a series of businesses as opposed to a monolithic entity, our efficiency in the space goes up along with our profits. Our commodities trading consists of operations at various places in the supply chain consisting of:
RAW COMMODITIES
Whether mined, grown, or farmed all commodities production relies on the earth. As a company that is committed to sustainable practices our approach to commodities extraction is focused on the latest in technological innovations as a means to co-exist with the planet. For example, we use the latest in satellite and seismic technologies to locate inground metals, minerals, and hydrocarbon formations in an attempt to be more efficient in terms of drilling and digging. We promote the latest in chemical free refining processes. We encourage crops to be grown using basic water saving techniques, and sustainable fertilizer. We are big proponents of livestock and agriculture being treated with organic sanitizers and biocides which actually work better than the traditional practices. While many see this as unnecessarily raising costs, we see it as a necessary function in order to maximize our long-term profits. In many ways, these practices can actually save money by creating efficiencies in other areas of the traditional supply chain. By sustaining the Earth, Taurino Capital is also sustaining the primary source of all commodities for the benefit of all stakeholders of the planet.
LOGISTICS: TRANSPORT & STORAGE
Proper supply chain management is an industry in and of itself. Transportation and storage of commodities can have a big impact on profits. Having a good understanding and access to reliable partners in the shipping and transportation business is a necessity to a successful commodities operation. We see that many of the bigger commodities traders will actually own and operate shipping companies as an ancillary business offering to their primary business of commodities. Understanding the commonly used shipping terms and what the implications of those terms means is also important in the commodities space. Who pays for shipping, insurance, and storage and when payment is made can have a big impact on the price point of a given commodity. Equally important is having readily available and reliable storage where security, and in some cases refrigeration are key issues. At Taurino Capital we spend a lot of time dealing with logistics issues and have partnered with a logistics firm to deal with the bulk of our needs.
END USER REFINING & SALES
Throughout the supply chain of a commodity, it may be traded and switch hands multiple times before ending up in the hands of an end user. Typically large technical manufacturers have multi-year contracts with their suppliers to ensure they maintain a steady flow of raw material that is then used in a product. They will oftentimes purchase from an aggregator or a refinery whose job is to secure steady supplies of various commodities and deliver them at a certain spec, price, and at regular intervals. Most aggregators are quite active in the area of commodities trading, working with multiple traders, producers, and other aggregators to ensure they have the supply they need to provide to their end user customers. As an active trader, Taurino Capital participates in various aspects of the supply chain. We seek to work with partners who can do what they say as errors, delays, and other inefficiencies can be costly.
Interested in working with Taurino?
We are ready to invest our capital with companies whose vision and goals are aligned with our own. Contact us to see if we match up.