MB CENTENARY: The 1990s

The 1990s saw the end of the two-generation triumvirate of the Rice-Oxley, Tarring and Cordero families.

First Frank Rice-Oxley retired in 1990, then in 1992 Trevor Tarring reached the executive directors’ retirement age of 60 and Tom Hempenstall took over as md. Tarring was invited to become non-executive chairman, which post he occupied until the end of the decade.

This may have irritated some of the corporate governance box-tickers, but cannot have been too bad a formula as the 1990s were the decade throughout which Metal Bulletin plc recorded 20% annual profit growth.

The decade also saw the retirement of Brian Orbell in 1993 and of Graham Walton in 1998. Another corporate change was the loss of close company status when Framlington matched Elsevier’s 13% stake in us.

1990 was the year when the thrust into the world of futures outside metals was continued with the acquisition of Managed Account Reports (MAR), a US business monitoring the performance of commodity trading advisers. This required an approach to the City for funds, a process involving some hiccups.

Once again, rising staff numbers called for more office space. In Worcester Park we now occupied all of both the office blocks near the station and bought our own warehouse, while in Lower Marsh we set about physically enlarging the premises.

Lambeth Council’s total disarray meant our planning application was ignored for a year until the government stepped in and passed all outstanding applications en bloc. We created enough extra space to be able, for a while, to sub-let a floor.

A short crisis due to Metal Bulletin’s City of London printers going broke was a blessing in disguise as we made the leap to offset printing, direct input and an A4 page size by returning to our previous printers in Richmond.

In 1991, we sowed another small seed that was to grow considerably, with the establishment of our own research arm by recruiting Neil Buxton.

With conferences a buoyant sector of activity we felt the effect of the Gulf War on attendances. A couple of events were cancelled, but able to be reinstated later in the year. The group’s first exhibition was successfully staged by Metal Bulletin’s sister title Futures & Options World.

In 1992, we bought Bradford-based Wool Record, which in property terms would have been described as ripe for restoration. A potentially significant change on the shareholder register saw ambitious UK publisher of local and specialist papers, Emap, take over Elsevier’s 13% in the company and soon enlarge it to 20%. However, it too made no attempt to influence the conduct of the business and eventually sold the stake on. We moved up from the USM to the fully-listed market on the London Stock Exchange.

A significant move in 1993 was MAR switching its emphasis from commodity trading advisers to fast-growing hedge funds. This was followed the next year by its first Bermuda hedge funds conference, quickly established as an annual must-visit for the industry.

Diversity was needed
As the early years of the 1990s were sluggish ones for metal markets, the diversification was helpful.

We mounted no less than 50 conferences across the group in 1994, a total not repeated for some years thereafter. Metal Bulletin heaved a sigh of relief in 1995, because metal markets finally turned up decisively. The company fully entered the electronic age by distributing three services – Prices, Fast Track and Steel Track – on three carriers – Bloomberg, Reuters and Telerate.

Copper debacle
In metals, the headline story of the decade was Yasuo Hamanaka’s copper trading debacle, which left Sumitomo with a $2.6 billion loss to explain in 1996.

It had piled up over the ten years that Hamanaka was responsible for hedging the copper exposure of the Japanese Smelter Pool (JSP) which centralised the concentrates purchasing and associated hedging for all the Japanese copper smelters.

In a series of court hearings which shed some, but not enough, light on the story, it even appeared the problem might have started under Yasuo Hamanaka’s predecessor, Saboru Shimizu. Hamanaka, who appeared to have derived very little personal benefit from the affair, received a not very onerous prison sentence and Sumitomo set about reforming its systems for controlling its traders.

The other LME news of the decade was the introduction of the secondary aluminium alloy contract, the first time the bourse had traded alloy rather than an elemental metal. It made a slow start, despite great care being taken over the special requirements for storing this material for possibly an extended period.

Structurally more important, but less concentrated and dramatic, was the start of the story of steel raw materials like iron and manganese ore, progressing from the previous 20 years as poor relation commodities to star performers.

The millennium bug
A threat to all commerce that ended “not with a bang but a whimper” was the supposed inability of many computer programs to handle the transition from 20th to 21st-century dates.

Known as the “Y2K” problem it made a lot of work for software writers and consultants and FOW’s training activity. Whether it was due to these precautions or the subject being over-hyped was never clear, but in the event there were very few service failures or system crashes.

For Metal Bulletin the threat was real enough, as it had invested heavily in computer hardware, software and personnel from the mid-1980s.

Diversification remained a strategic aim and in 1995 we bought Oil Price Assessment (OPAL), which tracked prices of motor fuel in Europe, and Sea Net, a software house covering ocean freights. It was initially loss-making, but its software was used to launch Metal Net, an initiative on home territory.

Total staff reached 300 in some eight locations (not counting correspondents). Later we took rented offices on Westminster Bridge Road as an overflow for Lower Marsh.

After 83 years’ publication (with a small gap) as a print product as Quins Metal Handbook and Metal Bulletin Prices and Data, the annual was issued only as a CD-Rom.

As the decade closed, Metal Bulletin was supplying more and more information electronically, but the twice-weekly print product remained its backbone, not least because advertisers were slow to recognise the electronic product as a good medium.

Apart from the Gulf War, the effects of which are still reverberating, the zeitgeist of the decade, sparked by the fall of the Berlin wall in 1989, was a form of liberalisation of some Communist regimes and the break-up of the Soviet Union.

The process was never without bloodshed, but nowhere was so much shed as in the Balkans. Metals, especially alumina and aluminium, were heavily involved in the privatisation of industries in Russia and the rise of the oligarchs.

The impact of these events on markets generally was profound.

Trevor Tarring
editorial@metalbulletin.com