Mercuria Shifts Upstream as Metals Supply Chains Tighten

Mercuria is pushing into upstream metals assets as supply-chain disruption and geopolitical risk force traders to rethink control of critical materials. 

The Swiss commodities trader is taking a 25% stake in an aluminium smelter in Indonesia operated by China’s Tsingshan, its first equity investment in processing capacity.

The move signals a broader pivot towards securing physical supply in increasingly volatile markets.

It comes as aluminium supply chains face renewed pressure following disruption in the Strait of Hormuz, a key maritime chokepoint.

The closure has constrained flows equivalent to around a fifth of global aluminium supply, exposing the fragility of heavily concentrated shipping routes.

Prices have responded accordingly, with benchmark aluminium rising sharply since the disruption began.

For traders like Mercuria, this volatility is reinforcing the need for greater control over sourcing and production.

Earlier this year energy consultancy Baringa noted energy trading houses were expanding into metals.

David Kane, Partner, expert in commodities and energy trading, noted at the time: “This move is not about broad diversification into all metals but a targeted play on those critical to the energy transition.”

Mercuria's zinc and copper deals

Mercuria’s move is an example of this. Industry analyst Federica Maiorano says: “Mercuria’s move into direct aluminium smelter ownership is an important sign of how commodity traders are changing their role in the supply chain.

“By moving into asset ownership, Mercuria is positioning itself closer to production at a time when both copper and aluminium markets remain fundamentally tight.”

The company has already deployed more than US$3bn in pre-payment financing across metals supply chains, providing upfront capital to producers in exchange for future offtake.

These deals, spanning copper and zinc, have helped secure access to material in tight markets.

Key agreements include financing for copper production in Kazakhstan and Zambia, alongside offtake arrangements in the Democratic Republic of Congo.

Together, they underline how traders are increasingly acting as supply chain financiers, not just intermediaries.

Strengthening visibility

The shift into equity ownership marks a further step in that evolution. By taking stakes in production assets, Mercuria can reduce exposure to market dislocation while strengthening visibility over long term supply flows.

Indonesia’s growing role in metals processing also reflects a wider supply chain realignment.

Resource rich regions in Asia and Africa are attracting investment as companies seek to diversify away from traditional supply bases and mitigate geopolitical risk.

At the same time, the strategy carries financial implications.

Mercuria’s expanding metals and energy portfolio has driven up debt levels, prompting scrutiny from lenders as trading houses scale up capital intensive operations.

However, the company maintains it has sufficient liquidity to support its growth. Its leadership has signalled continued investment in both metals and liquefied natural gas, highlighting the increasing interdependence between energy and materials supply chains.

'Capital follows logic'

This linkage is particularly pronounced in aluminium, where smelting is highly energy intensive. Access to reliable and competitively priced energy is becoming as critical as access to raw materials themselves.

Earlier this month, Mercuria CEO Marco Dunand said: “We’re pushing further into energy and adjacent sectors where we see long‑term structural demand. At the end of the day, capital follows logic - markets evolve, and strategies have to evolve with them.” 

Mercuria is also targeting copper mining investments, reflecting strong long term demand driven by electrification and energy transition technologies. Securing upstream exposure to copper is likely to become a central pillar of its supply chain strategy.

The broader trend is clear. Commodity traders are repositioning as integrated supply chain players, combining financing, logistics and production to navigate an era defined by disruption, resource competition and shifting trade flows.

That evolution could reshape how critical materials are sourced, financed and delivered in the years ahead.