Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

The power of a metal pricing syndicate: a lesson from history

Dec 12, 2011 | 08:31 AM |

Hotline was discussing the Indonesian tin producers’ pricing circle, which broke down late last month, with one third-generation metal man last week.


The internal pressure that generally destroys such arrangements struck a chord for him.


When his father, a steel merchant in the north of England, learned he was joining the industry, he told him a cautionary tale about the likelihood of such syndicates collapsing – and doing so in less than two months, which is roughly how long the Bangka island tin smelters held out for.


His father attended a meeting with a dozen or so of his peers and rivals.


Together they must fight to ensure a fair price for their product.


There was, therefore, grim and unanimous agreement to a proposal that they would not sell any steel for less than £30 per tonne.


Which was all very well.


But as the merchant left the meeting, which was breaking up in ones and twos, he heard a fellow syndicate member talking on a payphone.


“They’re all set on £30. So if we offer now at £29 we should get business done.”


History does not record the merchant’s reaction.


But the pricing ring had not even lasted the night.

Latest Pricing Trends Year Over Year


How will the US Treasury Department’s sanctions against UC Rusal affect the US downstream aluminium sector?

They will have a severe impact; companies might go out of business.
They will have a limited impact, but there will be some disruptions
They will have no impact, business will be unaffected

View previous results