Hotline takes a look back at some of the big developments in 2015 that no one predicted.

1. The 'Chinese Share Scare'. This summer’s equity collapse had a huge bearish impact on metals prices and sentiment and also led to the regulator’s ban on short-selling in equities. In the winter, 'malicious short selling', a phrase first coined during the share scare, was blamed for the low base metals prices in China.

2. That Glencore share price collapse. At the time of writing, the Glencore share price was languishing 71% below where it was this time last year, despite the company's efforts to restructure and reassure investors.

3. The Iceberg ahead for Noble. Like the Titanic, the markets never saw the iceberg coming. A series of reports were published by the entity known as Iceberg Research, with allegations, strongly denied by Noble, leading to large declines in the company’s share price. By December, Noble shares were worth 69% less than at the start of the year.

4. Those production cuts seven years after the global downturn. This time last year, no one would have thought that producers would be making yet another round of production cuts across base metals and ferro-alloys.

5. The big split. In a move that had long been mooted, but never looked sustainable, Alcoa’s decision to split itself into two separate companies, one focusing on its upstream business and the other on the value-add, technology-driven side of its activities, came as a shock to the market.

6. That premium rollercoaster. First aluminium premiums soared to life-time highs, then they crashed. A drop to $90 per tonne for the benchmark MJP aluminium premiums, for instance, took the wind out of the sails of aluminium traders.

7. That arrest. André Esteves, ceo of Brazilian investment bank BTG Pactual, was arrested as part of an corruption probe involving Brazil’s state-owned oil company Petrobras. A tumultuous few days followed for BTG.

8. A rising star in financing deals. Although nickel took its spot as the worst performing base metal this year, it actually became the metal of choice for financing deals over copper, where banks were still concerned about the red metal in a post-Qingdao environment. The launch of SHFE’s nickel contract earlier in the year and the granting of permission for international brands to be deliverable made this a more fungible market for regional arbitrage trade.

9. Those contract breaches. Credit concerns in China escalated this year and the impact could not have been predicted. Take cobalt, where Chinese companies breached the terms of their intermediate contracts as they experienced difficulties in obtaining letters of credit (LCs) after prices plunged, and chrome ore, where buyers in China forced late-stage price negotiations or walked away from cargoes as they too struggled to open LCs amid sharp price drops.

10. Those 50-80% price cuts. The extent of price declines in Metal Bulletin price quotations was a surprise. Tellurium has lost 81% since the start of this year and selenium and indium have lost 69% and 63% respectively. Metal Bulletin's 37% and 44% manganese ore indices have both lost 57%.

Editorial Staff
editorial@metalbulletin.com