AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
In 2023, the global copper market is in a state of oversupply, with supply exceeding demand by about 130,000 tons. However, the market situation is expected to change significantly in 2024, with forecasts indicating a copper supply gap of over 50,000 tons. In simple terms, while previously the supply of copper exceeded demand, demand is now increasing and supply remains limited, leading to a shortage in the market. Recently, the Chinese government approved more private enterprises to process copper concentrate, which has a larger environmental impact, in response to the shortage of standard copper concentrate.
Aluminum prices have also soared recently. On November 8, the main alumina futures contract reached a new high since its listing, peaking at 5,394 yuan per ton, a 49.8% increase compared to the beginning of the year.
Russell Hardy, CEO of Vitol, the world’s largest energy trader, stated at the Financial Times Commodities Summit held in Singapore that global oil demand is expected to peak within ten years, and Vitol is targeting the metals market. The oil business will peak at some point, roughly ten years from now. We are very interested in engaging with the larger metals market, which includes the three major metal markets: steel and iron ore, copper, and aluminum.
Vitol has been continuously recruiting senior metal traders from competitors. The trading firm reported a substantial profit of $13.2 billion last year. With the decline of the oil industry, Hardy believes that the metal business has significant growth potential during the electrification phase.
In August, Vitol announced the acquisition of Noble Resources, a Hong Kong-based trader specializing in the trading of oil, coal, and metallurgical coke.
Other trading companies, such as Gunvor and Mercuria, have also been expanding their metal teams to capitalize on the energy transition. According to media reports, the French oil giant TotalEnergies is also considering entering the copper trading sector.
Hardy stated that the fluctuations and growth in the oil industry are somewhat interrelated with the anticipated growth in the metal sector. Metals are an area that is expected to experience substantial growth during the electrification phase of the energy transition. However, scaling the metal business to the same level as Vitol’s energy sector will be a long and challenging process, given the intense competition in the metal market. Trading companies need to find their own “advantages” and “pathways.”
