On Thursday local time, Trafigura, a global commodity and crude oil trading giant, released a statement on its official website, disclosing that the company had encountered a fraud in the nickel trading process.

In the statement, Trafigura accused that the company found that a series of companies controlled by Prateek Gupta, a Dubai metal trader, had committed "systematic fraud" in the process of trading nickel metal. Through the preliminary inspection of the containers delivered by the company, it was found that the contents were not nickel at all. Considering that more containers are being transported, the company expects to cause a loss of up to US $577 million, which will be included in the financial report for the first half of 2023.

Trafigura also made a "Versailles" in the announcement, stressing that even if the loss was included, the companys profit in the first half of the year would still rise year-on-year.

Although it is not uncommon to cheat in commodity trade, it is not uncommon to forge warehouse receipts, sell more than one order, and camouflage metal with stone spray paint in recent years. However, the overturning of such a famous giant still caused a rush of financial media, and the whole story of the matter was thoroughly investigated at the first time.

Trafigura started trading with this merchant named Gupta as early as 2015. Before Christmas last year, Trafiguras investigators found that there was no nickel in the container that should have contained nickel, but only some other metals.

Due to the rise of the electric vehicle industry, the Russian-Uzbekistan conflict, the LME nickel trade turmoil and other factors, the price of nickel is much more expensive than other base metals. According to LMEs quotation on Thursday, the price of a ton of nickel is about $30000, while the price of copper is only 9000. The value of nickel in a single container can reach $500000. Due to the large volume of transactions and the lack of special security during transportation, nickel is often targeted by fraudsters.

As mentioned above, perhaps $577 million wont hurt Trafigura, but the professional image of a commodity tycoon has been hit. According to insiders, Trafiguras Socrates Economic, who is in charge of nickel and cobalt trading, has left the company. However, the company also stressed in the announcement that there was no sign of insider involvement in fraud.

As one of Trafiguras most senior metal traders, Economyu has been in charge of many different businesses in South Africa, Democratic Republic of Congo and China, but failed to get promoted in the process of changing the head of the metal sector in 2021. Even so, the hot metal in charge of the electric circuit is still a noticeable job.

The latest incident has also made the situation of Trafiguras metal sector worse. According to the financial reports of the first three quarters of last year, the operating profit of the metal sector fell by 24% year-on-year, far inferior to the booming crude oil trading sector. The metal sector contributed only 16% of the companys operating profit, which is also the lowest in the past decade.