Why 5N Plus is so exposed to a Chinese minor metals exchange...

5N Plus’ profits slumped in the fourth quarter of 2014, driven by a crash in bismuth prices caused by recent developments on the Fanya Metal Exchange. But why is minor metals refiner based in Canada so exposed to a Chinese exchange?

Since the Fanya Metal Exchange entered the minor metals market, many assumed that it was mainly producers in China who benefitted from the higher prices caused by strong investor demand, while consumers suffered as they were forced to pay higher prices than fundamentals would otherwise determine.
But 5N Plus, the world’s largest bismuth consumer, benefited when bismuth prices and demand rose on the back of the Fanya exchange, with earnings jumping in the first half of 2014
And towards the end of the year, as Fanya faltered and bismuth stocks paused, 5N Plus likewise suffered
It posted a $2.5 million net loss for the period, driving its shares down by 15%, which it attributed to bismuth price volatility following the latest developments on the exchange.

Part of the reason for the company’s exposure is a result of the fact that almost all the minor metals used...


Chloe Smith

March 16, 2015

13:22 GMT