As of today, many markets seem to be interconnected and new ideas come along and therefore, each market needs to adapt to these changes.
Head of market and credit risk Lukasz Bielak, gave us a quick preview of what he will be addressing at ComRisk this coming May.
Please tell us briefly about your role as well as what you’re currently working on?
My position is the Head of the Market and Credit Risk at KGHM, global mining company. I am responsible for market analyses, credit risk management, hedging activity and trade finance.
What is your overview of the current metals market?
It’s a very interesting place right now as there are a lot of changes happening on the market. After few hard years for the industry, positive end of the last year shows that we might be facing the end of the bear market. Nevertheless metals market is still focused on improving cash management and looking for tools helping in managing finance area effectively. Another layer of complexity is being brought by new regulations which are reshaping financial space, including commodities. Changing environment brings some risks but also opportunities for these who are active and look for improvements.
Why is it so important to tighten the links between commodity and financial markets?
As of right now, it seems that many markets are much more interrelated compared to the past. It’s clearly visible in the commodity market that very active financial institutions are trying to bring new ideas into the market. The complexity of solutions in trading is also much bigger than in the previous years. I think that it’s always important to observe new ideas appearing on the market and try to verify whether using the give added value to the company.
Why have the large European banks left trade finance? How have they affected the price of metals?
I think that investment banking can provide a real innovation for the trade industry. However, banks have to find a way to proceed in complex commodities world, with new regulatory burden and within their strategic objectives. Not all of them had been really active on commodities as they just hadn’t enough trading infrastructure developed. This is why they hadn’t been competitive in the commodities business and they had to leave. I think that commodity prices are more related to fundamentals (supply & demand) and additionally to the attractiveness of commodities from the investor’s point of view. I don’t think that changes in the banking industry have a lot to do with price levels in long term horison.
Any chance you can give us a sneak peek of the topic you’ll address at COMRISK: "Trade finance and the global financial environment for commodity trading”?
I think the complexity of the subject has been increasing recently in commodities trading and there is a response on this from the market. However, to find a proper solution there is a need to go through the whole process of assessment and select the most suitable one. This requires time, costs, skilful people and effort but is worth to do it if you really want to optimise your business and stay competitive.
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Lukasz Bielak, Senior Market Risk Analyst,KGHM Polska Miedź.
A graduate from Wroclaw University of Economics with two specializations: IT & Econometrics and Finance M anagement. He has completed also postgraduate study Business Psychology at Kozmiński University in Warsaw and many courses in the field of risk management, mining investments and valuation of companies.
Associated with KGHM since 2007. He started as a specialist in Commodity Risk Unit. He has participated in a number of projects related to risk management, treasury, IT, commercial and investments. Currently he is the Head of the Market and Credit Risk at KGHM, responsible for market analyses, credit risk management, hedging activity and trade finance.