| VIEW FROM THE TOP
CHINA, THE GOLDEN MARKET FOR METAL EXPORTATION JOSÉ ANTONIO BERLANGA General Manager Mexico of Mercuria
Q: How advanced are Mexico’s practices when it comes to
nickel. Construction in China paused for a while but it is
commercialization and where does Mercuria fit in?
starting to pick up pace again, which will impact the mining
A: In terms of commercialization, Mexico has good
industry as well.
practices. The market has become more open and has
360
incorporated international standards. Previously, the
When it comes to precious metals, China’s stock exchange
market was quite closed and mostly overseen by the large
in Shanghai calculates its own prices for precious metals.
Mexican operators that internally commercialized their
This used to create a considerable discrepancy between the
products. But as there are more companies in the industry,
prices in China and the rest of the world. But the variation
new opportunities for traders have opened up. There
has lowered a great deal, and now it has somewhat leveled
used to be little space for traders. Some companies may
out. There will always be a difference but it is much more
want to save money by trading their products themselves
minimal. China is an important region for traders and
but they have to realize that we do much more than buy
represents more than 80 percent of exportation destinations
and sell material. We also provide solutions and offer
for metals. Overall, Asia represents a significant amount of
expertise in terms of logistics and even taxes. The return
the world’s trade, followed by Europe.
of tax money is a big issue in Mexico that can take several years. Our company offers to take over these matters in
Q: How do you expect copper prices to perform in the
the supply chain. It is also not so easy to find smelting
medium term?
companies willing to purchase material as each one is
A: Copper will continue to rise but to no more than
looking for very specific requirements and characteristics.
US$7,500/t. Eventually supply and demand will make prices fall back to a more stable position around US$6,500/t
Mexico exports around 1.6 million tons from ports such as Manzanillo in the Pacific Ocean for products moving toward the Asian market
taking into consideration the history of the metal. The prices will motivate many companies to start evaluating more projects in copper. The amount of nonferrous concentrates Mexico exports is around 1.6 million tons from ports such as Manzanillo in the Pacific Ocean for products moving toward the Asian market. There is some movement of copper toward the US but it does not compare to the level of concentrates that are exported to China.
Q: How is Chinese consumption influencing the metals trading market?
Q: What factors are behind the rise and fall of zinc prices?
A: China continues to grow technologically and its
A: Supply was greatly affected by the closure of zinc
internal demand is likely to keep rising and surpass global
mines globally. Demand rose after stocks dropped,
supply of these metals. We believe that the exportation
bringing zinc to US$3,800/t as there was a great deal of
business in China will continue to be favorable. Demand
speculation regarding EVs and batteries. Some analysts
for vehicles, both traditional and electric, will continue to
have even predicted a price of US$4000/t but this is
require lead and other battery metals such as zinc and
too optimistic. Prices will probably be further impacted as new mines
Mercuria is one of the largest energy and commodity trading
come online in the next couple of years. We believe prices
companies in the world, with over 1,000 employees and
could drop to around US$2,500/t. It may seem like a steep
operating bases in over 50 countries. Founded in 2004, its
drop but considering that this metal is normally around
turnover in 2015 was US$56 billion
US$2,300/t, it should level out at an optimal price.
