Glossary

Account Manager

(also Key Account Manager) see sales manager

Actuals

the physical commodity which underlies a futures contract

Alloy

a mixture of two elements in which one is a metal, e.g. aluminium alloys, copper alloys, nickel alloys etc.

Aluminium

a silver-white, malleable, metallic element

Aluminum

see aluminium

Analyst / Analysis

a person who conducts analysis and research on a particular market or product. The research analyst uses their findings to create informed advice on factors which may affect the business.

Application Engineer

also called Sales Engineer – a person who has technical knowledge of the sold product/services and is part of the active sales force. The person can work in-house or in the field. See also Technical Customer Support Manager.

Arabica Coffee

one of the main varieties of coffee beans

Arbitrage

the simultaneous purchase and sale of similar commodities in different markets to take advantage of price differences

Arbitration

a form of dispute resolution between parties outside the courts

Back Office

consists of the administrative and support part of a company who are not client facing

Barrel

a unit of measurement used for crude oil

Bars

a long, rectangular and evenly shaped piece of non-ferrous or ferrous metal

Base Metals

term used to describe a group of common, inexpensive metals e.g. copper, nickel, lead, and tin

Benchmark (oil)

a reference price for buyers and sellers of crude oil

Billets

long solid metal semi-finished product with a square cross-section

Biodiesel

a type of biofuel, made from vegetable oils, fats or greases and can be used in diesel engines.

Biofuel

fuel made from living matter, primarily plants, and is considered a renewable energy

Brent Crude

one of the three major oil benchmarks, primarily used in Europe

Broker

An individual who executes orders on behalf of a client, buying and selling physical or derivative products

Brokerage

A company that offers services to buy and sell physical or derivatives products on behalf of their clients

Bunker Fuel

also referred to as marine fuel oil, a type of fuel used to power ships, for more information see residual oil

Business Developer

a person whose role is business development

Business Development

the activities and initiatives involved in pursuing strategic opportunities for improving a company. This can include expanding market reach, increasing revenue, building strategic relationships etc.

CAISO

stands for the California Independent System Operator. Oversees California’s bulk electric power system, transmission lines and power market.

Canola

a crop that produces oilseeds which are crushed to make canola oil and meal

Carrying Charge

the cost of storing, insurance, and any other financial charges incurred by holding a physical commodity

Cash

1. Another term to describe the physical market. 2. A term used to describe the purpose of a commodity such as cash crops. They are called as such because they are grown to generate a profit as opposed to feeding the grower’s family or as food for the producers’ livestock

Cash Market

also known as the spot market. Refers to the physical trading market rather than the financial market. Transactions are settled immediately as opposed on a specified future date like in the financial market

Cast (casting)

the process of pouring liquid metal into a mould, with a hollow cavity of the desired shape, before being allowed to cool and solidify

Casthouse Manager (Cast House Manager)

a person responsible for the productivity and efficacy of the building where molten metal (i.e. aluminium, steel, copper, etc.) is cast into different products

CBOT

acronym for the Chicago Board of Trade

CHF

Swiss Franc

Chicago Board of Trade

one of the world’s oldest derivatives exchanges, focused on agricultural products

Chicago Mercantile Exchange

a Chicago based financial and commodity derivatives exchange. Focuses on energy and metals

Chrome

a layer of chromium over another metal for decorative or industrial purposes

Chromium

a hard, corrosion-resistant metallic element

CIF

acronym for trading term ‘Cost, Insurance and Freight’. Used when the seller arranges and pays for the transport and insurance of goods by sea to a named port and provides the buyer with the necessary documents to obtain the goods

CME

acronym for Chicago Mercantile Exchange

Cocoa

beans from the cacao tree used in the production of chocolate

Coffee

milled beans from the fruit of the coffee plant. The two main varieties of coffee bean are Robusta and Arabica

Coking Coal

see metallurgical coal

Commodities

see commodity

Commodity

a raw or primary product that can be bought or sold and is interchangeable with other commodities of the same type, i.e. a barrel of oil should be more or less the same product regardless of producer

Commodity Trading

the overall term used to describe the physical or derivatives trading of commodities such as coffee, metals, oil products etc. (for more information see commodity and trading)

Contingency Search

‘no win no fee’ style of recruitment search. The client only pays if a candidate is successfully introduced

Copper

a soft, malleable metallic element with high thermal and electrical conductivity

Cotton

a soft natural fibre which grows around the seeds of the cotton plant

Credit Risk

the risk of a financial loss if a counterpart of a derivatives transaction does not meet its financial obligations on time

Crude Oil

a natural, unrefined petroleum product obtained through oil drilling and mostly processed into refined oil products. There are different classifications of crude oil that can be traded: Brent, West Texas Intermediate (WTI), Dubai Crude, Oman Crude etc.

Currency

a system of money used in a country, for instance, to pay for goods or services

CV

acronym for Curriculum Vitae. A document usually sent as a part of a job application, detailing a person’s professional experience, qualifications and education

Dairy

refers to products containing or made from milk such as butter, cheese, cream etc.

Derivative

a contract whose value depends on an underlying asset such as futures, options and swaps. These contracts are traded on financial markets

Diesel

a liquid fuel used in diesel engines

Distillate

a liquid product condensed from vapour during distillation. Oil products are grouped into distillates after fractional distillation

Distillation

the process of separating a pure liquid from a mixture of liquids by heating and cooling

Downstream

the latter stages of industrial processes

Edible Oil

a liquid, often plant-based, manufactured for human consumption from a fat or oil source other than milk i.e. sunflower oil, coconut oil, olive oil, palm oil, peanut oil, sesame oil

Electrolysis Manager

The person who is in charge of the electro-chemical process of electrolysis within a metals production plant. Electrolysis is commonly used to refine a metal (e.g. bauxite into aluminium) and/or extract valuable by-products like precious metals from a raw material

Energy

an area within commodities covering oil products, coal, power, gas, petrochemicals and renewable energy

Equity

a stock or security, equities represent an ownership interest in a company. If the value of the company increases, the value of the equity also increases. Equity is bought and sold in the form of shares

Equity Analyst / Analysis

a person who analyses a company’s financials, forecasts financials and ultimately makes investment recommendations based on their findings

ERCOT

acronym for the Electric Reliability Council of Texas. Manages the flow of electrical power in Texas

ETFs

acronym for Exchange-traded Funds

Ethanol

a type of biofuel made from the fermentation of sugars found in sugar cane, sugar beets and grains such as corn, sorghum and barley

EUR

Euro

Exchange

an institution used for the trading of commodities

Exchange-traded Funds (ETFs)

an investment fund traded on stock exchanges which invests in commodities

Execution

see trade execution

Executive Search

A type of recruitment involving seeking and approaching highly qualified individuals for senior-level and executive positions. Headhunting is the less formal term for executive search

Extraction Search

a service performed by a recruitment agency where a client instructs them exactly on who they want to hire and the agency does the job of approaching the desired candidate

Ferroalloy

a mixture of two or more elements where iron is one of the elements (more information)

Fertilisers

see fertilizers

Fertilizers

a nutrient and mineral rich substance used to improve crop yields, soil fertility and crop development

Financial Instrument

monetary contract between parties

FOB

acronym for shipping term Free on Board or Freight on Board. Used to indicate who is responsible for paying transportation charge, who is in charge of the movement of the goods and when the title passes to the buyer

Foreign Currency

the money of another country, see currency

Fossil Fuel

a natural fuel formed over millions of years from the remains of plants and animals

Foundry

a factory which produces metal castings

Foundry Alloys

metal alloys created in a foundry. Primary foundry alloys are produced from pure aluminium while secondary foundry alloys are produced from scrap aluminium materials

Front Office

the part of a company that deals with sales and other client facing activities

Fuel

a material that when burned produces heat or power e.g. fuel oil, coal, gas

Fundamental Analysis

using supply and demand information to predict future price movements

Futures

a type of derivatives contract where a legal agreement is made to buy or sell a commodity at a predetermined price at a specified time in the future

Gasoline

also known as petrol. A fuel most commonly used to power transport

GBP

Great British Pound

Grain

the small, hard seed of a food plant. Common grains include wheat, corn, barley, rice and millet

GSCI

acronym for Goldman Sachs Commodity Index, one of the most popular commodities indices

Hard Commodities

a type of commodity that is not grown, usually extracted or mined

Headhunter

a person or company who searches for and approaches candidates for specific job positions on behalf of a client. They are normally employed for specialist searches

Headhunting

see headhunter

Hedge

an investment strategy to reduce risk. Hedging involves using financial instruments to offset the risk of price movements

Hedge Fund

a vehicle where investors pool money and a hedge fund manager manages it according to the fund’s strategy. The aim is to use different strategies to maximise investor returns. They are generally managed more aggressively than mutual funds

Henry Hub

the main gas hub in the USA, located in Louisiana

HFO

acronym for heavy fuel oil, see residual oils

HKD

Hong Kong Dollar

Human Capital

a term used to denote the value of the soft and hard skills a person has which can be enhanced through training, focused professional development, etc.

Human Resources

1. The term refers to viewing the people who make up an organisation’s workforce as a resource in themselves based on their skills, knowledge and motivation. 2. Term used to describe the department or team in the company responsible for activities relating to employees (recruitment, payroll, tax, compensation, employment laws etc.)

ICE Futures Europe

an exchange for futures and options contracts for energy products

ICE Futures US

a derivatives exchange with an emphasis on agricultural products

Index

an indicator of how well an asset is performing in relation to a standard, in terms of commodities they are normally price indices

Inflation

a general increase in the prices for goods and services which consequently reduces the purchasing value of money

Ingots

a block of metal in an oblong shape

Interview

a formal meeting between a company and candidate to assess the candidate’s suitability for the role and discuss the position. Can be carried out in person, by video conference or on the telephone

Iron

a strong, magnetic, silvery-grey metal used in construction and manufacturing

Jet fuel

a type of fuel used in aviation

Juice Trading

the trading of the natural liquid contained in fruit and vegetables obtained through extraction or pressing. The biggest juice market is orange juice

Kerosene

a light fuel oil commonly used in domestic heating

LC or L/C

acronym for Letter of Credit

Lead

a soft, malleable metal with a low melting temperature

Letter of Credit

issued by a bank which guarantees the payment of a customer’s draft up to a stated amount up until a specific date, eliminating risk for the seller

LIFFE

acronym for London International Financial Futures and Options Exchange

Light Distillates

a group of oil products which form at the top of the cooling tower during fractional distillation. Example include LPG, gasoline and naphtha

Liquefied Natural Gas

natural gas which has been changed to a liquid state for ease of transportation and storage

Liquefied Petroleum Gas

a fuel used in heating, cooking and to power vehicles

Livestock

collective term used for animals and birds raised in an agricultural setting for food such as cattle, sheep, pigs, chickens, fish, and seafood etc.

LME

acronym for London Metal Exchange

LNG

acronym for Liquefied Natural Gas

Logistics

the part of a company dealing with the flow of activities between point of origin and point of consumption. Concerned with the transportation and storage of products

Logistics Manager

A person handling the logistics within a company and closely interacts with the front office to ensure a smooth trade execution

London International Financial Futures and Options Exchange

an exchange focused on agricultural products

London Metal Exchange

a futures exchange focused on non-ferrous metals

LPG

acronym for Liquefied Petroleum Gas

Market Analyst

someone who researches and analyses the situation of a specific market to help a company to make informed strategic decisions within that market. Commonly, the person performs supply and demand (S&D) and competitor analysis and strongly interacts with traders and/or sales people

Market Maker

a trader who is prepared to buy and sell in the cash or derivatives market to provide a two-sided market and liquidity

Metallurgical Coal

also known as coking coal. Coal of a sufficient grade for use in steel production

Metallurgist

a scientist specialising in specific metals/minerals (e.g. aluminium, steel, copper) who commonly work on the extraction and/casting and alloying of the products. They are often employed at a metals producing organisation in the engineering and/or research and development departments. Some metallurgists also support the front office, handing technical customer service requests (see technical customer support manager)

Metallurgy

the science that focuses on the chemical and physical properties of metals and covers the processes of extracting, refining and alloying metals to give them a certain desired shape

Middle Distillates

a group of oil products which condense in the middle part of the cooling column. Examples of middle distillates include kerosene, diesel, jet fuel and heating oil

Middle Office

the part of the company that manages risk, operations and finance

Milk

Liquid dairy products, see dairy

Minor Metals

term for a group of metals which have a relatively low production and more specialist applications e.g. antimony, cobalt, titanium, zirconium

MISO

acronym for the midcontinent Independent System Operator. It provides power transmission service in the Midwest US and Manitoba, Canada and a southern US region covering Arkansas, Mississippi and Louisiana

Molasses

a thick, dark brown syrup obtained from refining raw sugar

Naphtha

a flammable oil used in solvents, as a fuel and in petrochemical production

Nasdaq Stock Market

the second largest stock exchange in the world

Natural Gas

a fossil fuel found underneath the earth’s surface

Natural Gas Liquids

fuel consisting of the hydrocarbons. They are components of natural gas which are separated from the gas state in the form of liquids. Examples include: ethane, butane, propane and pentane

NBP

acronym for National Balancing Point, the UK gas trading hub

New York Mercantile Exchange

a commodity futures exchange, part of the CME Group

NGL

acronym for Natural Gas Liquids

Nickel

a malleable, silvery-white metal

Non-ferrous Metal

a metal that does not contain iron

Nut Oils

liquid obtained from nuts which yield oil such as walnuts, hazelnuts, coconuts etc.

NYISO

the New York Independent System Operator, the sole operator of New York’s power grid

NYMEX

acronym for the New York Mercantile Exchange

Oil

a black hydrocarbon liquid substance formed from plant and animal material found under the earth’s surface

Oil Products

materials derived from crude oil. If someone trades, operates or analyses ‘across the barrel’, they work with all oil products from light distillates to heavy fuel products

Oilseed

the seed from a plant which, when crushed, yields oil. Oilseeds include sunflower, poppy, soybean, and palm kernels

Operations

refers to the administration of day to day activities of the business conducted to ensure the highest efficiency possible

Operations Manager

a person that handles the operations within a company

Options

a derivatives contract between a buyer and seller that gives the buyer the right but not the obligation to buy or sell an asset at a later date

Origination Manager

1. A person responsible for finding and cultivating new business opportunities, for instance, when being employed at a bank. 2. A person that sources a specific commodity like coffee, nuts, fuel, crude oil, etc. for a company (see Purchasing Manager)

OTC

acronym for Over-The-Counter

Over-The-Counter (OTC)

to describe a security traded outside a formal exchange

Paper Trading

see derivative trading

Petrochemicals

chemicals derived from petroleum

PFA

acronym for Primary Foundry Alloys, see Foundry Alloys

Physical

refers to the market where the real, tangible product is bought or sold

Pipes

a round, hollow metal tube. Normally bigger than metal products classed as tubes.

PJM

a regional power transmission organisation in the US, part of the Eastern Interconnection

Portfolio Manager

a person who implements the investment strategy of a fund and manages the day-to-day trading

Power

electrical energy

Precious Metals

term used to refer to rare, naturally occurring metals such as gold and silver

Purchasing Manager

a person responsible for the buying or approving the acquisition of goods for the company to use or sell

Quant Analyst

a person who uses quantitative methods to develop strategies and help companies make financial and business decisions

Quantitative

used to describe a type of economic analysis used to understand or predict behaviour, events or outcomes through mathematical calculations, measurements, research and statistical modelling

Recruitment

the process carried out by an internal team or external party to fill a job position

Refiner

an organisation that purifies substances i.e. crude oil, natural gas food oil, sugar

Refinery

a production facility that separates and purifies raw materials

Relative Value

a method of measuring an asset’s value by taking into account risk, liquidity and value of similar assets

Renewable Energy

energy generated from sources which are not finite or exhaustible i.e. solar power, wind power, geothermal, hydro

Research

1. See analyst 2. Collecting information to aid innovation and improvement of products or processes, see research and development

Research & Development (R&D/RnD)

activity combining research, and creating solutions to problems or developing new goods

Residual Fuels

also known as heavy fuel oil (HFO) or bunker fuel, it is the remainder of crude oil after distillation and is used to power ships and power stations

Resumé

usually used as a synonym for CV, it is often considered to be a brief version of a CV, usually one page long

Retained Search

a type of search where the client pays the recruitment agency an upfront fee to perform a specific search with the rest being paid with during or on completion of the search

Risk Management

the process of evaluating potential financial risks as well as implementing procedures to reduce or avoid their impact

Risk Manager

see risk management

Robusta Coffee

one of the main types of coffee bean traded

Rod

a long, thin metal bar

Rubber

a tough elastic substance made from the sap (latex) of the tropical rubber plant

Sales

the exchange of goods for money, see sales manager, business development

Sales Engineer

a salesperson who has the technical knowledge related to the goods and their market and sometimes are also referred to as technical customer support managers within the metals industry

Sales Manager

the person responsible for a company’s sales activities, sometimes also leading a team of sales people

S&D

acronym for supply and demand

Search & Selection

a recruitment company service where they vet candidates in order to submit the most suitable candidates to the client

Semi-finished Products

used to describe metal products that will undergo further shaping or manipulation before becoming the finished product

SGD

Singapore Dollar

SGX

acronym for the Singapore Exchange

Shates

a hot or cold rolled material where the thickness is between that of a hot rolled plate and a cold rolled sheet

Singapore Exchange

an exchange dealing with energy and metal products

Slab

also referred to as ‘slab for rolling’. An ingot which has a flat and rectangular metal shape and is mostly processed further into rolled products

Smelter

an establishment where metals are separated from their ores through heating and melting

Soft Commodities

a type of commodity which is grown rather than extracted or mined (more about soft commodities)

Sorghum

a cereal grain, important for its drought tolerance and versatility. Can be used as human food, livestock feed and as biofuel

SPP

– acronym for the Southwest Power Pool. Oversees the bulk electric grid and wholesale power market in the central US

Steam Coal

see thermal coal

Steel

a strong alloy of iron and carbon

Sugar

a sweet crystalline substance obtained from processing sugar beets or sugar cane

Supply and Demand (S&D)

a fundamental economics concept. It refers to the correlation between price and how much of a good is supplied to the market

Swap

a derivative contract where two parties exchange cash flows of financial instruments

Swaption

an options derivatives contract where the purchaser has the right but not the obligation to engage in a swap after a specified time

Talent Acquisition

a form of on-going strategic recruitment that bears in mind the long term direction of the company. This often involves planning months in advance for specific upcoming vacancies

Technical Customer Support Manager

a person responsible for offering technical advice to clients while also managing queries about different product types, qualities, and processes. A Technical Customer Support Manager usually also manages the quality claim management as well as looks into improving internal operational and technical processes to increase customer satisfaction

Thermal Coal

also known as steam coal, a grade of coal used for generating power and heat

Tin

a ductile, silver-coloured metal. Often used to coat other metals to prevent corrosion such as in food cans

Titanium

a hard, durable, silver-grey metal. Mainly used as an alloying agent with other metals to be used in aircraft and spacecraft

Trade Execution

the action to complete the order of a buy and/or a sale of a physical or derivative product. People that work in trade execution are sometimes also referred to as operations managers as they are taking care of the administrative tasks related to trading

Trader

an individual who buys and sells a product with the intention to profit from price changes

Trading

the action of buying, selling or exchanging, for instance, commodities within a country or between countries

Trading Floor

the area of a business where assets are bought and sold, normally associated with futures and stock exchanges

Tropical Oil

oil derived from tropical trees or plants. Examples include coconut and palm oil

TTF

acronym for Title Transfer Facility, it is a trading point for gas in the Netherlands

Tubes

long, round or square, hollow ferrous or non-ferrous metal products