Posted on 15 Feb 2023
Singapore-headquartered French multinational commodity trading company Trafigura reported it has discovered alleged systematic nickel trade fraud with some companies related to Indian businessman Prateek Gupta.
According to Trafigura, the loss could be up to $577 million. Despite the loss, Trafigura still expects its net profit during the first half of 2023 to exceed H1 2022's, Kallanish learns.
Trafigura says: "The fraud concerns containerised nickel in transit during 2022 and involved misrepresentation and presentation of a variety of false documentation. The fraud is isolated to one specific line of business. We have seen no evidence to suggest that anyone at Trafigura was involved or complicit in this illegal activity."
The company claimed to have discovered containerised nickel replaced with other metals in late 2022.
Companies Trafigura reported as suspicions include TMT Metals and companies owned by UD Trading Group.
Xu Yang, chief macroeconomist at Hubei Huimang Consulting, says: "Nickel is a common metal used by scammers. Its high value means a container can be worth $500,000, but it trades in relatively high volumes and doesn't have the strict security of precious metals like gold. This allows scammers to take advantage ... For Trafigura as one of the largest energy and metal traders, this loss will raise questions about its transaction verification and counterparty checking processes."
China Futures thinks this incident has limited impact on supply and demand as the influence on the nickel supply chain is temporary, and the increasing trend of nickel price is unsustainable."
Source:Kallanish
