How did you embark on a career in the steel industry?
After completing my master’s degree, I was interviewing for jobs in the financial sector. At that time Stemcor was looking to expand their derivatives trading team. Working in the steel industry never crossed my mind but after meeting the management team there, I was intrigued by the possibilities of joining a relatively new but potentially fast-growing steel derivatives market. Thankfully, Stemcor saw some potential in me and five years later I am very proud of the progress we have achieved together.Could you please tell us a bit about your role at Stemcor and what the company does?
Stemcor is a leading independent service provider for the steel industry, trading around 3 million tonnes of physical steel in 2023. Our company helps customers choose from over 3,500 different grades of steel and raw materials available in the market. Stemcor’s derivatives trading business has grown significantly over the years and we now trade a variety of finished steel and raw material products on key exchanges, including the LME. My role in addition to trading steel derivatives is managing a derivatives trading team focused on developing the Group’s quantitative trading capabilities while also looking for growth opportunities through new derivatives instruments and the application of derivatives in Stemcor’s physical trading business.What do you like best about being a steel derivatives trader?
The unpredictability of the steel derivatives market is what makes it exciting. The past few years have been unusually volatile: we had to deal with protectionism, a pandemic, wars and conflicts and many other disruptions. For a trader this is incredibly challenging and yet also an invaluable learning experience. There are certainly less stressful jobs out there, but it is always rewarding when you get the decisions right. In addition, it’s been great watching this market grow so quickly since its early days and I do not expect the pace to slow down anytime soon.How do you use the LME steel prices and futures?
From a quantitative perspective, we now have a substantial set of LME price data that we can use to identify trends and aid our decision making. Aside from this, we are very focused on using LME futures in our physical trading business. We already use LME CFR Turkey Steel Scrap to mitigate our physical exposure and would like to do the same with LME FOB Turkey Rebar and LME FOB China HRC. In addition, we continue to share the benefits of hedging and many creative ways that derivatives can be used to enhance physical steel business with our customers.How does it feel to win the inaugural LME-sponsored ISTA Steel Derivatives Trader Award?
It’s a special recognition that caps off my five years anniversary of trading steel derivatives. It also signifies how far we’ve come since the early days of LME steel futures. I hope this award becomes a standard in the industry as we have many wonderful people working in the steel derivatives market and contributing every day to its strong growth.What big themes do you see for steel in 2024?
2023 was a challenging year, but the inevitable easing of the interest rate environment means sentiment and spending should stay positive throughout the year. We are seeing incredible resilience in steel pricing globally and that is likely to stay with us for a while thanks to steady demand and strong supply discipline. Of course, some risks remain: wars and conflicts continue to disrupt supply chains and the domestic developments in China may have additional international impacts. That being said, economic strength in many parts of the world, especially the US, has surprised many and I am optimistic we will see a continuation of this in 2024.How do steel futures fit in the business model of a physical steel trader like Stemcor?
At Stemcor we see steel futures as an integral part of our business that we expect to grow further in importance over time. Derivatives instruments allow us to reduce our exposure and protect our margins in volatile times. Steel futures also provide an opportunity to extend this protection to our customers by fixing prices on a long-term basis. Using derivatives is still a relatively new concept in the steel industry, but growing liquidity is attracting more players to the market, making us more excited about its future potential.How do you see yourself progressing in your career following your award win?
We are still at the very early stages of steel derivatives market and there is so much scope left. Continuing to grow Stemcor’s derivatives business is my key priority but being more active in promoting the steel derivatives market across the industry is also important. The more interest we generate in this market, the better trading conditions we will create for everyone else in terms of liquidity and tighter spreads. I look forward to cooperating with the LME for years to come and excited to see a continuation of our market’s robust growth.Gintas Kryzius
Gintas Kryzius, Commodity Derivatives Trading Manager at Stemcor Global Holdings Limited, was recently awarded the inaugural LME-sponsored ISTA Steel Derivatives Trader Award at the annual International Steel Trade Association lunch.