Commodity Dealing and Brokerage in the US Industry Market Research Report Now Available from IBISWorld

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Regardless of bull or bear markets, the Commodity Dealing and Brokerage industry has received a boost from the increased use of commodities. Traditionally used as a hedge against inflation and future risk, commodities have become a valuable diversification tool. The industry has been on a roller-coaster ride since 2005. Overall, the use of commodities has increased because of strong returns generated by speculators. These strong returns and diversification benefits have led to a rise in the use of commodities in pension funds and hedge funds. In the five years to 2017, the industry will experience strong growth. Shaky investor confidence combined with low interest rates will stoke inflationary fears, which will increase commodity-trading activity. Also, regulation will help the industry through 2017. Improved transparency and the use of central clearing will shore up the industry's position as a respectable branch of the financial services market. For these reasons, industry research firm IBISWorld has added a report on the Commodity Dealing and Brokerage industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Regardless of bull or bear markets, the industry has received a boost from the increased use of commodities.

Because the volume and volatility of the commodity markets drive the Commodity Dealing and Brokerage industry, it has been on a roller-coaster ride since 2005. According to IBISWorld industry analyst Doug Kelly, the industry has experienced three distinct phases over the period: booming growth that led many commodities to hit historical highs, a crash in late 2008 as a result of the recession and beginnings of recovery. Despite the volatility, industry revenue is expected to increase 4.0% annually to $17.5 billion over the five years to 2012, including a projected 5.4% increase in 2012. This positive growth clearly masks the volatility this industry has been through.

Regardless of bull or bear markets, the Commodity Dealing and Brokerage industry has received a boost from the increased use of commodities. Traditionally used as a hedge against inflation and future risk, commodities have become a valuable diversification tool. Use of commodities has also increased because of strong returns generated by speculators. "These strong returns and diversification benefits have led to a rise in the use of commodities in pension funds and hedge funds," Kelly says. In the five years to 2017, the industry will experience strong growth. Shaky investor confidence combined with low interest rates will stoke inflationary fears, which will increase commodity-trading activity. Also, regulation will help the industry through 2017. Improved transparency and the use of central clearing will shore up the industry's position as a respectable branch of the financial services market.

Industry concentration in the Commodity Dealing and Brokerage industry is at a medium level, with the top four firms holding almost half of the market share of industry revenue. Falling commission prices and technology changes partly drive industry consolidation, which allows trade execution to take place without a broker. This gives an advantage to larger brokers that offer a range of value-added services, such as clearing and research. Industry consolidation is expected to increase in the coming years as smaller firms find it more difficult to compete with Wall Street and Chicago giants in technology, broker talent and client acquisition. Expect JP Morgan Chase & Co., Morgan Stanley, Bank of America Corporation and The Goldman Sachs Group Inc. -– the top players in this industry – to increase their market share directly through acquisitions and indirectly through other firms that reduce or exit their commodities activities. For more information, visit IBISWorld’s Commodity Dealing and Brokerage report in the US industry page.

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IBISWorld industry Report Key Topics

The industry includes companies and individuals that act as brokers and dealers in the commodities market. Brokers are individuals who trade commodities futures on the behalf of clients, while dealers trade for their own accounts. Commodity futures are contracts to buy a predetermined good at a specific price and date in the future. Steel, corn, wheat, oil and gold are examples of commodities on which future contracts can be written.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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