• Trafigura detects large quantities of counterfeit nickel container shipments
• Indian entrepreneur Gupta allegedly responsible for nickel fraud
• Little safety precautions in the nickel trade
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Nickel is a commodity that has experienced a major boom in recent years, thanks in particular to high demand from the electric car industry. Nickel is an important component of lithium-ion batteries in electric cars, which is why Tesla is probably planning to build a gigafactory in Indonesia, the largest nickel exporting country. With the Philippines, the second most important export country for the raw material is in Southeast Asia. The Dutch commodities trading company Trafigura is now one of the leading processors of the international nickel trade. Trafigura has recently been the focus of particular media attention, which shouldn’t make the company happy.
Trafigura tracked down counterfeit nickels back in December
Trafigura has apparently become the victim of a systematic fraud scheme. Shortly before Christmas, investigators from the company noticed counterfeit nickel in a container load that had already been purchased in the port of Rotterdam. “Since late December 2022, a small portion of the containers purchased by these companies have been inspected upon arrival at destination and found to be nickel-free,” Bloomberg quoted a Trafigura communiqué as saying. “Most of the shipments are still in transit and still need to be inspected.” In the last few days, other containers with inferior materials that were passed off as nickel have been tracked down.
As a result, Trafigura has already written off US$577 million, equivalent to more than 20,000 tonnes of nickel. This sum represents the maximum risk of loss. However, Trafigura hopes that the final burden will be lower. For this, however, Trafigura would have to receive reimbursement costs from the companies found guilty, which cannot yet be considered certain at the moment. Despite the burden of millions, the up-and-coming raw materials group expects an increase in net profit for the first half of the year, as reported by the German Press Agency.
Trafigura launches investigation into Indian corporate empire
Although Trafigura amicably parted ways with its head of nickel and cobalt trading, Socrates Economou, the company rules out that any of its employees were involved in the scam. Rather, Trafigura suspects the Indian entrepreneur Prateek Gupta, who is said to be responsible for the counterfeit nickel deliveries through his subsidiaries TMT Metals and subsidiaries of the UD Trading Group. “In the meantime, we have to assume that we have become the victim of a fraud scheme by Mr. Gupta,” the Neue Zürcher Zeitung quoted a company spokeswoman as saying. The nickel deliveries were incorrectly declared and numerous freight documents were forged. Trafigura has already launched investigations into the Indian corporate empire Gupta. Gupta has been selling nickel and other metals to Trafigura since 2015, and now the Dutch raw materials group has put trading relations with the Indian group on hold for the time being.
Nickel: Sought-after metal can be easily counterfeited
It is not the first time media reports have reported counterfeit metals. Rather, in recent years there has been information about forged storage confirmations, duplicate shipping documents and containers that were filled with painted stones instead of valuable materials. So it became known in 2021 that the commodity trader Mercuria Energy Group, headquartered in Geneva, received containers filled with stones that had been declared as copper cargo.
The nickel trade is also a particularly popular area for scammers, since nickel deliveries are profitable enough to generate high profits from counterfeiting. Institutional Money put the value of a container filled with nickel at $500,000. On the other hand, nickel is sufficiently heavy and available in such large quantities that the silvery-white metal is controlled far less strictly than the more valuable precious metals such as gold, platinum or palladium. In view of the fraud uncovered by Trafigura, the security precautions could also become increasingly strict in nickel trading.
Editorial office finanzen.net
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