SINGAPORE/LONDON, Sept 10 (Reuters) – With China’s insatiable appetite for iron ore cooling alongside a slowing economy, once in-demand traders of the steelmaking raw material face a new reality: fewer financial perks and tougher resume requirements.
Anyone without a network of connections in top market China need not apply. And the days of guaranteed bonuses to attract the best talent are largely over. Just two years ago, iron ore traders were the envy of even investment bankers, a famously well-paid breed of financial players.
“Two years ago, banks were all over the market. If you could spell iron ore, they wanted you in their team,” said Paul French, the London-based global head of commodities at recruiting firm Global Sage. Now, with iron ore prices retreating from a record near $200 a tonne in 2011 to $134.80, recruiters say the phones are not ringing like they used to.
“I haven’t had a requirement for an iron ore trader for some time. Eighteen months ago we were regularly asked about it and I don’t think we’ve been asked about it in the last 12 months,” said Charles Crichton, Asia general manager at UK-based Commodity Appointments.
“The boom of iron ore is not there at the moment to justify paying someone a large amount of money in order to get them across the line because they’re never going to make it back for you.”
Iron ore became the new pot of gold when a shift away from four decades of annual pricing to a shorter, spot-based system in 2010 opened the door to more players.
At the same time, stimulus-led economic growth in China after the global financial crisis helped ramp up demand for the raw material, driving its price to an all-time high in February 2011.
Traders of the raw material, the commodity most closely linked to China’s fortunes, became among the best paid and most sought after in the trading community.
While the basic salaries are mostly unchanged, the performance-related bonuses are on average lower than they used to be and guaranteed bonuses are now a rarity, recruiters said.
The average annual compensation at banks and trading houses for a mid-level iron ore trader is a basic salary in the range of $150,000-$200,000 plus an average bonus of 10 percent of the profit the trader makes for a company, according to a recruiter.
A top role such as global head of iron ore at a bank could fetch a salary of about $400,000, and a bonus including cash and stock of as much as $1.5-$2 million.
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