Hotline takes a look back at the jaw-dropping moments of 2014.
1. That fateful June day
On June 2, Metal Bulletin revealed to the market that authorities had blocked the shipment of some materials at the Chinese port of Qingdao as they investigated the allegedly fraudulent use of warehouse receipts multiple times to raise finance.
No one could have predicted the huge impact this revelation had on global markets, which is still being felt today and will continue to cause ripples for years to come. Here’s how it panned out.
2. That rebuff
The potential creation of a mining and trading giant with a combined market capitalisation of over $160 billion was the talk of the town in Q4. All eyes were on Rio Tinto in October as it revealed that it had rejected a merger approach from smaller peer Glencore.
3. Those two sell-offs
If copper traders outside China were not paying attention to China’s commodity hedge funds before a certain day in March 2014, they certainly have been since then.
In fact, two sell-offs, one in March and one in November, rocked copper trading this year. Short-sellers moved with such conviction on those days that they sent copper prices to four-year lows, despite the anticipated copper surplus failing to emerge.
4. That rollercoaster ride
Nickel’s flight, then its crash, then its jump, then its limp into the new year were the talk of base metals speculators this year. Even those who predicted that Indonesia’s ore export ban would make 2014 the year of nickel failed to predict the subsequent rollercoaster ride that would see European nickel traders trading in their pyjamas.
5. That other export ban
And in H2, just as the nickel market seemed to have accepted, and priced in, the fact that the Indonesian ore export ban would remain in place, news spread that a similar ban had been proposed in the Philippines, leading to H1-style price swings.
6. The big zinc question
By the end of the year, Trafigura had boosted its share in Nyrstar to about 15%. So just what is Trafigura planning? Find out more here.
7. Those precious benchmarks
An unexpected shakeup in precious metals benchmarking in 2014 brought an end to a century-old method of gold price setting.
In November, the ICE Benchmark Administration saw off competition from other exchanges and pricing providers to be selected as the third-party administrator for the LBMA Gold Price.
Earlier in the year, members of the LBMA also gave their backing to a joint proposal by CME Group and Thomson Reuters to administer the silver fix from August.
8. Those soaring aluminium premiums
Towards the end of 2013, European aluminium consumers were delaying discussions about 2014 contracts because they thought premiums would drop sharply when the London Metal Exchange implemented new rules for warehouse companies requiring them to match deliveries in with deliveries out.
How wrong they were.
The numbers did not fall. Buyers still needed metal in the first quarter, and premiums leapt by almost $100 per tonne in January 2014 alone. They continued climbing all year until they broke through the previously unthinkable level of $500 per tonne in September 2014.
9. That Fanya investigation
As predicted in 2013, the Fanya exchange became more prominent in the West in 2014, but then the exchange surprised the market by announcing it had undergone an official investigation and would be adjusting its trading rules.
10. That Metro purchase
And we were within a stone’s throw of Christmas when Goldman Sachs completed the sale of its London Metal Exchange warehouse unit Metro International Trade Services to a subsidiary of the Reuben Brothers, formerly one of the world’s largest aluminium producers through Trans-World Metals.
Tough new regulations have removed the attraction of warehousing and led many to question why a new entrant would be attracted in the first place. So, Andrea Hotter asked, why do the Reuben Brothers want Metro? The market is about to find out.
READ ON: Check out, here, the ten things that had surprised us this time last year.
