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1) The global metal trading industry is facing a challenging period, with prominent players like Trafigura Group and the Orion Commodities Fund experiencing losses and setbacks in the past year. Despite governments' growing concerns about the future availability of critical metals for the energy transition, weak industrial demand has kept metal prices under pressure, making it difficult for traders to generate profits. “It’s dawning on people they’ve talked themselves into a supercycle that isn’t happening,” said Concord Resources Chief Executive Officer Mark Hansen, whose company reported its first-ever loss last year. “The environment is the most complicated and tricky for metals trading that I’ve ever seen.” Factors such as rising interest rates, alleged frauds, and deals gone wrong have added to the industry's challenges. Even major players like Glencore have reported lower margins and decreased profits in their metals trading units.“It has been a trickier year and you’ve seen lower margins in metals trading,” Gary Nagle, chief executive of Glencore, which vies with Trafigura for the title of the world’s largest metals trader, told journalists in August. However, some companies remain optimistic about the future and are looking to expand in the metals market. he industry's performance is closely linked to miners, processors, manufacturers, and builders who rely on metal trading companies for their operations.
2) The London Metal Exchange (LME) has initiated a collaboration on product development with its Chinese competitor, the Shanghai Futures Exchange (ShFE). This partnership comes after ShFE's exploration of launching an international nickel futures contract, since the nickel trading fiasco that sent the metal prices sky-rocketing back in March 2021 on the LME. The London Metal Exchange, owned by Hong Kong Exchanges and Clearing (HKEX), is the world's largest and oldest metals platform. The collaboration aims to enhance product innovation for international participants in risk management and price discovery. ShFE has been consulting with the industry regarding the nickel futures contract on its International Energy Exchange (INE). The LME has faced challenges, including a lawsuit and reduced nickel trading volumes, following the sharp spike in nickel prices as mentioned before. LME is also contemplating the role of over-the-counter (OTC) markets in the metals industry, while the ShFE is looking to expand its warehousing network outside of China.