Industrial metals
Copper, aluminium, nickel. Priced by construction, electrification, and now battery demand.
The invention
The problem. Stone tools break.
Copper smelting gave an entire age its name. The London Metal Exchange, founded 1877 above a hat shop, still trades on the ring system devised for merchants awaiting ships — and its contracts still specify physical delivery, which is why it periodically discovers the metal is not there.
Wine Vessel (Jia)
c. 1250–1046 BCE · Cleveland Museum of Art · CC0
Where it has failed
Not a list of disasters. A pattern library.
- 1996Tokyo and London
The Sumitomo copper affair
A single trader accumulated a dominant position and hid roughly $2.6bn in losses over a decade.
Physical commodity markets are opaque enough for one participant to distort them for years.
- 2022London
The nickel squeeze
Nickel more than doubled in hours; the LME cancelled several hours of executed trades.
An exchange can void your profitable trades to protect the exchange. Counterparty risk includes the venue itself.
In your ledger
Reaches you through construction and vehicle costs, and increasingly through anything with a battery in it.
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