The former partner of the Russian state-owned company Rosneft, one of the largest trading houses in raw materials Trafigura, was at the center of a scandal: a ship with a batch of nickel from India came with the wrong metal. The cost of the rare metal consignment was estimated at $577 million, but upon arrival at the port of destination, it turned out that the ship was full of cheaper metals, and there was no nickel on board at all. This is reported by Bloomberg with reference to a statement by Trafigura, which intends to initiate an international investigation.
“Since the end of December 2022, a small portion of the containers purchased from these companies have been checked as they arrive at their destination and found to be nickel-free. Most deliveries remain in transit pending further review,” Trafigura said in a statement.
Nickel was supplied by a group of companies belonging to Indian businessman Pratik Gupta – we are talking about TMT Metals and subsidiaries of UD Trading Group. Against the businessman Trafigura and intends to file a claim demanding compensation. Taking into account the insurance, the company's losses may be lower than the value of the cargo, however, as the agency notes, the key problem for Trafigura is its tarnished reputation.
In recent years, the company has become one of the market leaders in commodity trading, but the lack of product quality checks can lead to a loss of trust and a shrinking customer base. The market still does not understand why the raw materials did not pass a quality check at the sender's port. Against the backdrop of the situation with the tanker, the head of the nickel and cobalt trading group, Socrates Economou, has already resigned, although the company itself does not associate his departure with the scandal. At the same time, Economou is one of the pioneers of Trafigura, who has been working for the company since 2007, having gone through several stages of its development.
Representatives of the businessman, as well as the Indian partners of the company, declined to comment. At the same time, Trafigura has been working with Gupta structures for quite a long time – since 2015, although since last year the trader began to revise some agreements. Trafigura itself denies that the scandal will somehow seriously affect revenues for the upcoming reporting period, and intends to exceed last year's figures by the end of the half year. Last year, profits from the supply of metals sank amid a sharp increase in revenues from the oil and gas sector.
In Russia, Trafigura has long been one of the most important foreign partners of the state company Rosneft, and the cooperation of the market majors came to naught only after the imposition of severe Western sanctions. In January, Trafigura sold a 24.5% stake in Nayara Energy Limited, an Indian oil refiner whose largest shareholder is the Russian giant (owns 49.13%). And in the summer of 2022, Trafigura withdrew from the shareholders of Vostok Oil, a megaproject of Rosneft.