FT panel “Hedge Funds: Masters of Volatility”

May 19, 2026

During the FT panel “Hedge Funds: Masters of Volatility”, our CIO, Aline Carnizelo, explained how overly optimistic sentiment around the current disruption to Middle East oil flows could quickly translate into significantly tighter energy markets in the near future.

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Environmental

Environmental commodities are the tradable credits resulting from regulations on emissions which quantify the cost and volume of pollution. These are typically policy-driven financial instruments that have been established to incentivize the transition to a low-carbon economy.

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Carbon allowances, part of regional compliance markets, are tradeable permits that represent the right to emit a specific quantity of CO2e (carbon dioxide equivalent). These are often a cap-and-trade system, where emission allowance limits are tradeable among market participants.

Ferrous Complex

The Ferrous Complex is a group of commodities composed of iron (Fe) and steel products. The products have been around in various forms for centuries, and are vital for the construction, manufacturing, transportation and infrastructure sectors. Futures trading has only been developed over the last 20 years.

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Steel is an alloy composed mainly of iron, with some carbon and other alloys depending on the application. Steel products can be traded in different shapes and characteristics, as well as across different regions, representing its historical importance as a strategic industry.

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Iron Ore is a large bulk commodity market that is traded with varying mineral concentration levels, and used exclusively for steelmaking. Its production base is concentrated to a few regions globally, with logistics a key component of the supply chain.

Agricultural

Agricultural Commodities, also known as Soft Commodities, are raw materials and products derived from farming activity and are crucial for sustaining global food supplies. Pricing can be significantly influenced by supply issues such as weather and crop decisions. Futures trading in agricultural commodities has been active for over 150 years.

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Corn is a staple agricultural commodity cultivated for food, animal feed and industrial purposes such as ethanol production. It is the most widely followed soft commodity market given its diverse use as feedstock.

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Wheat is a staple grain that is cultivated globally for its versatile applications in food production. It is the primary ingredient in bread, pasta and cereal, making is a crucial component in the world's food supply chain.

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Soybeans are grown for their high protein content, with production mainly in the Americas. It is widely used in animal feed and cooking oil, and also play a role in sustainable agriculture as it contributes to nitrogen fixation in the soil.

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Sugar is derived from sugarcane or sugar beets, and is a key ingredient in the globaly food industry. Raw and refined sugar are traded, with changing consumer preferences potentially influencing production levels.

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Hogs are a livestock commodity and refer to domesticated pigs raised for meat production, particularly pork. Prices are influenced by feed costs, consumer demand and overall trends in the broader livestock market.

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Orange Juice is the largest product in the global juice market and is a key commodity in the worldwide beverage industry. Prices are influenced by citrus crop conditions and consumer preferences.

Energy Products

Energy Products encompass various commodities crucial for producing and consuming energy. They have historically been primary sources for generating power, fueling transportation and supporting industrial processes worldwide. Futures trading of these markets were established in the 1980s.

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Brent Crude Oil is a major benchmark for global oil prices, representing a blend of sweet light crude oils extracted from the North Sea. It is a key price indicator influencing energy markets and economic trends, and is typically the largest component of many commodity indices.

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WTI (West Texas Intermediate) Crude Oil is a benchmark for crude oil extracted in the U.S., particularly the Permian Basin. The product is valued for is low sulfur content and is also closely monitored as the U.S. is the largest oil producer and consumer in the world.

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Gasoline is a refined petroleum product derived from crude oil, used as a fuel for internal combustion engine vehicles. Prices are driven by underlying crude oil prices, refining costs and consumer demand in the transportation sector.

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Gasoil, also known as diesel fuel, is a refined petroleum product used a a fuel for internal combustion engine vehicles, with a higher energy density that gasoline. Its applications are diverse, including autos, industrial and agricultural machinery and back-up power generation.

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Heating oil is a refined product mostly used in commercial and residential heating. It is similar to diesel, but with additives to enhance efficiency in heating systems, and can be stored in tanks in regions where gas pipelines are not available.

Precious Metals

Precious Metals refer to rare metallic elements known for their high economic value and aesthetic appeal, with futures trading established in the 1970s. There are primary precious metal mines, but the minerals are also recovered as by-products or co-products when present in the deposit as they generate high value credits for the operation.

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Gold has a lustrous yellow appearance and has been highly valued as jewelry and currency throughout history. While there are some industrial applications, gold is primarily viewed as a financial asset and possibly the most accessible tradeable commodity for investors around the world.

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Silver is a malleable precious metal, with a lower unit value than gold as it is more abundant, making it popular for jewelry, coins and decorative items. It has a larger industrial use case than gold, including in high-value electrical conductivity applications and as a catalyst in chemical processes.

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Platinum is a dense precious metal and is the most well-known of the six platinum group metals. Its use is typically split evenly between autocatalyst and jewelry markets.

Image from Palladium
Palladium is part of the six platinum group metals, known for its catalytic properties and resistance to tarnish. It is mostly used in autocatalysts, where high recycling rates contribute to a valuable secondary market.

Energy Metals

Energy Metals is a relatively new classification for the industry, inspired by the increasing use of these minerals in energy applications such as batteries where market expansion far outpaces overall economic growth. This is an emerging futures trading market, with contracts only recently established.

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Lithium is the lightest and least dense solid element, highly reactive but with good heat and electrical conductivity properties. It has become a cornerstone in advancing rechargeable portable electronics and electrified transport applications.

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Cobalt is mined as a by-product in some copper and nickel deposits, and typically used in strategic industries such as aerospace components and chemical catalysts. It is increasingly used in battery cathodes to enhance energy density and ensure stability by preventing overheating.

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Vanadium is a transition metal known for its strong resistance to corrosion and ability to form stable alloys. It is mostly used in the production of specialty steels, typically for construction, but is increasingly gaining attention for its potential application in vanadium redox flow batteries.

Base Metals

Base Metals are commonly used metals in industrial applications such as construction, transportation, manufacturing and electrical components. Pricing is influenced by economic activity expectations and consumer confidence. Trading base metal future contracts is well established, with some markets going back nearly 150 years.

Aluminum is the largest base metal market by volume, and is a lightweight and corrosion-resistant metal known for its excellent strength-to-weight ratio. Production of primary aluminum is very energy-intensive, with applications ranging from aerospace and packaging to construction and electricity transmission.

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Copper is a ductile metal with excellent conductivity of electricity and heat. The vast majority of refined copper is extruded to electrical wiring and the metal is generally viewed as playing a critical role in the energy transition.

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Nickel is typically the highest value base metal per unit, known for its resistance to corrosion and high melting point. It is often alloyed with other metals in the production of stainless steel, though its contribution to energy density in lithium-ion batteries is playing an increasingly larger role in driving demand growth.

Image from Zinc
Zinc is mined primarily as a by-product, a bluish-white metal with excellent corrosion resistance. It is often used in the galvanization process, a cost efficient method to prevent steel from rusting, with smaller use cases in biological functions such as dietary supplements.

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Lead supply today is predominantly from recycled sources. It is used in batteries, radiation shielding and, historically, piping, though its usage is decreasing due to environmental and health concerns.

Image from Tin
Tin is the smallest base metal market by volume. Historically, over half of tin supply was from artisanal sources, though this has decreased significantly in recent years. It has a low melting point, making it easy to work with in applications such as solder, food packaging and bronze alloys (with copper).

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