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Hotline takes a look back at some of the big developments of 2015 that were accurately predicted by its reporters and contacts.
1. The collapse of Fanya. In 2014, Fanya became more prominent in the minds of the world’s minor metals markets, and after the investigation of that year, things turned sour for the exchange in 2015. Investors captured the chairman and demanded payments that the bourse could not make, the government sent a clean-up team in to see whether the exchange should be charged with fraud, and the stocks are still hanging over the market.
2. Bankruptcies among South African ferro-chrome producers. Low prices and rising costs have been plaguing South African ferro-chrome producers for years, sparking predictions of smelter closures. In the second half of 2015, Tata Steel and International Ferro Metals announced within weeks of each other that their South African smelting operations were in business rescue and up for sale.
3. A slow start for Al premium contracts. Last April, the London Metal Exchange first looked at launching contracts that would allow the physical market to hedge aluminium premiums. It recognised that if its warehouse reforms went to plan, the market might not have much need for premium contracts. The LME’s new aluminium premium contracts remain untraded two weeks on from launch and the lack of interest is a testament to the belated success of the warehouse reforms.
4. Increasing significance of SHFE pricing. Metal Bulletin has been monitoring the growing importance of Shanghai Futures Exchange Trading and its influence on the direction of metal prices on other exchanges for a long time. This year, the nickel contract – dubbed ‘hobgoblin’ or ‘devil metal’ in China because of its volatility – became a market mover in London within weeks of its launch.
5. The offtake for Big Hill in late 2014. In late 2014, Metal Bulletin said Glencore was the favourite to be awarded marketing rights for Big Hill cobalt alloy. Material from Ohio-based speciality chemicals provider OMG’s former Democratic Republic of Congo asset, Big Hill, began making its way to Glencore from 2015 July for marketing.
Editorial Staff editorial@metalbulletin.com