Critical Minerals and Energy Intelligence

The Nickel Market and Trafigura’s Fraud Allegations

I suppose it’s only to be expected when commodity prices surge but commodity trading house Trafigura has accused Dubai-based trader Prateek Gupta and associated companies of “systematic fraud” involving containerized nickel purchases, potentially leading to losses of up to $577 million.

Trafigura has initiated legal action against Gupta and his companies, UD Trading and TMT Metals. The alleged fraud includes misrepresentation and false documentation for the cargo. The scale of the fraud, which involves a significant volume of material, has alarmed market participants who are concerned about its impact on the wider nickel market. Unsurprisingly, the immediate effects have included price volatility, with nickel prices experiencing significant fluctuations after Trafigura’s press release. There are also concerns about trade financing and the potential impact on the availability of finance for nickel trades.

This is not a first off for the nickel market. The sector has experienced instances of fraud in the past, but the scale of the current allegations is particularly rare. You can read the news release here. It’s difficult to say what the long term implications for the industry will be but certainly it points to a need for more robust certification and tracking systems to make sure companies are getting what they have paid for. I also wouldn’t be surprised if other companies are urgently initiating checks to see if their inventories are what and where they believe them to be.

Anthony Milewski

Chairman, Nickel 28 Capital

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