Cobalt supply gives the electric vehicle manufactures the blues

 

Cobalt supply gives the electric vehicle manufactures the blues.

 As demand increases, coronavirus variants continue to disrupt supply chains and as nations and even corporations weaponize trade against their rivals who will be successful in securing the resources that they need?

If the shortage of semiconductors and the high prices of tin, lithium and copper weren’t enough to dampen production cobalt’s historically high prices its supply struggles to keep up with demand.

It shouldn’t be a shocker that China controls the lion’s share of cobalt. Though China hasn’t discovered significant amounts of cobalt in China yet, but it does control more than 40% of the cobalt mines in Republic of Congo.

The Republic of Congo provides the majority of cobalt supplied to the market today. It’s mined in the central African country and shipped over land to the South African port of Durban with the bulk of it being shipped too China to be processed. 

Cobalt has been a popular choice for batteries because the metal increases battery life and energy density, which in the case of EVs means additional range, by keeping the battery structure stable as the battery is continuously charged and discharged.

In addition to batteries Cobalt is used in aircraft engine parts, in alloys with corrosion/wear resistant uses, and in electroplating. Cobalt salts are used to impart blue and green colors in glass and ceramics. Radioactive ⁶⁰Co is used in the treatment of cancer. Cobalt is a component of vitamin B12, which supports the production of red blood cells.

Recycling has to play a vital role in the supply of cobalt and other vital resources but that will not be sufficient as demand increases.

So as the world weaponizes trade against its geopolitical and commercial rivals how will your firm secure the resources required to thrive into the next decade?

You're what? Tin roof……Rusted!

 

We enter into 2022 with tin prices continuing to surge to all-time highs. As demand increases, corona virus variants continue to disrupt supply chains and as nations and even corporations weaponize trade against their rivals who will be successful in securing the resources that they need?

To put the urgency into perspective there is no significant amount of tin mined or smelted in North or Central America. China is the world’s largest producer of tin with Indonesia, Malaysia, Myanmar, and Rwanda also being major producers.

One of the fears of non-Chinese producers is that the Chinese will flood the market with cheap tin like they have with cooper, rare earths and other products in the past and that is a valid concern.

 So as the world weaponizes trade against its geopolitical and commercial rivals how will your firm secure the resources required to thrive into the next decade?

 You're what? Tin roof……Rusted!

Shanghai Futures Exchange’s Copper Opens to International Participation

 The much anticipated inclusion of international participation in the Contract is planned to be launch on Nov. 19, 2020.

The enthusiasm for the highly liquid contract inclusion doesn’t come as a surprise as global capital markets traders seek alpha.

China is the world’s top consumer of metals and accounts for over 50% of the world's demand for copper.

The contract size is 5 metric tons, the price is quoted in Chinese Yuan, and the trading hours are 9:00 a.m. to 11:30 a.m. and 1:30 p.m. to 3:00 p.m.

Often considered a low risk commodity by traders because of its versatile applications and sometimes used as collateral in China’s shadow banking industry copper demand in China remains steady. #china #futurestrading #futures #SHFE #shanghai #copper #LME #cmegroup Ceres Ltd #alpha

Ceres brings Huishang Futures to meet trading platform firms in Chicago

Around two years ago Ceres Ltd signed a contract to aid Huishang Futures in their efforts to internationalize. Apart of that process was to educate them on the differences between the Chinese financial system and the American financial system in addition to classroom education we also brought them to Chicago to learn directly from some of the amazing firms in the futures industry.

David Nealis of Ceres Ltd brings Huishang Futures to Trading Technologies

One of the first stops on the list was to meet with some of the amazing futures trading platforms that global capital markets traders use. Since trading in China is very insulated trading global capital markets from one platform is a relatively new concept for the average trader there.

Ceres Ltd brings Huishang Futures to the CQG office in Chicago

Ceres Ltd brings Huishang Futures to meet with CTS in Chicago

For more information about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/Home.html

David Nealis interviewed by CGTN on Commodity Pricing

David Nealis being interviewed by CGTN on commodity pricing

David Nealis being interviewed by CGTN on futures trading in China

David Nealis is interviewed by China’s CGTN Television regarding the recent spike in futures trading in China. The segment is titled: Speculations in commodities raise concerns.  Please link on the link below to view the interview.  https://news.cgtn.com/news/3d497a4e786b6a4d/share_p.html?t=1489051930812 

For more information about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/Home.html

Bank of Jinzhou and Ceres Ltd

We have had a great working relationship with the Bank of Jinzhou from giving Trading Capital Markets seminars to introducing them to potential M&A deals in the USA.

Bank of Jinzhou Beijing Branch

Bob Meara, David Nealis and Jane Yang of Ceres Ltd at Bank of Jinzhou's Dalian Branch

David Nealis and Jane Yang give Futures Trading Seminar at Bank of Jinzhou

Bank of Jinzhou visits the CME Group in Chicago

Chairman of Bank of Jinzhou  watching the trading floor with David Nealis

For more information about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/News___Events.php

Shenyang Huatie Automobile Technology and Product Development Board

David Nealis at Shenyang Huatie Automobile

David Nealis was a Board Member of the Technology and Product Development Board of Shenyang Huatie Automobile

 

David Nealis with the Chairman of Shenyang Huatie Automobile

It was an amazing experience working with the great people at Shenyang Huatie Automobile from 2012 until 2015.

New technology installed to ensure quality

David Nealis at Shenyang Huatie Automobile

David Nealis enjoying the Tibetan Mastiff Puppies at Huatie

The Tibetan Mastiff Stud at Huatie

For more information about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/News___Events.php

The International Emerging Europe Business Council Board Member Experience

It was a good experience being a co-founder and then serving on the Board of The International Emerging Europe Business Council from May 2018 until October 2019.

David Nealis with Milan Bacevic Serbian Ambassador to China.

The International Emerging Europe Business Council is a platform located in Shanghai, China to facilitate business opportunities in Emerging Europe countries by working together with governments and businesses.

I relocated from Shanghai back to Chicago and felt I could not give enough of my time to IEEBC so I resigned from my position , I wish them the best as more trade is developed between Emerging Europe and China.

https://ceres888.com/Home.html

Warren Buffett Pitching Cherry Cokes in China

Warren Buffett on Cherry Coke

Billionaire Warren Buffett helped Coca-Cola launch Cherry Coke into the China Market by adorning a cartoon character of him onto limited addition Cherry Coke cans and bottles.

Who better to pitch Cherry Coke in China then the highly regarded investment genius who says that he drinks at least five cans a day consuming regular Coke at the office and Cherry Coke at home. He claims it is his secret to staying young.

Buffet didn’t ask to get paid to help with the promotion well at least not directly after all Berkshire Hathaway is the largest single shareholder in Coca-Cola with an investment worth about $17 billion.

The Oracle of Omaha’s cult like status isn’t just limited to Americans, an estimated 3,000 Chinese investors flocked to Berkshire Hathaway's annual shareholders meeting last year.

That subliminal message might be if I drink one of these everyday maybe I will be as Rich as Warren Buffet.

David Nealis 

While making my purchase of Cherry Coke at Family Mart in Shanghai,  I asked some Chinese people if they knew who was the person on the can a few said they didn’t know some creative answers and asked if it was Colonel Sanders of KFC ha ha ha.

The African Swine Virus Rages Across China

                        The African Swine Virus Rages Across China

David Nealis on the farm in Erdos, China.

As we enter the 2019 Lunar New Year of the Pig, the African Swine Virus is raging across China and now spreading to other parts of Asia and Europe.

This incurable disease that typically takes years to eradicate has reached at least 24 Chinese provinces and regions since the first reported outbreak in August of 2018. It’s a common thought that the African Swine Virus was introduced to China from Russia. The US –China Trade War has China scrambling to find alternative sources of commodities to prove to the US that they do not need them to help feed their 1.3 billion population, this has some conspiracy theorist imaginations going wild.

On our yeoman farm in the Inner Mongolia City of Erdos, we feared the rapid spread of the African Swine Virus, as many of the large and small producers in the region started to contract the virus so we decided to send our hogs to market earlier than normal to avoid the chance of losing all of our stock to the virus. All that we kept were a few mature females that we use for breeding and so far they have been spared from contracting the virus.

Jane Yang on the farm in Erdos , Inner Mongolia China

What is the African Swine Virus?

The African swine fever virus (ASFV) is the causative agent of African swine fever (ASF). The virus causes a haemorrhagic fever with high mortality rates in pigs, but persistently infects its natural hosts, warthogs, bushpigs, and soft ticks of the genus Ornithodoros, with no disease signs.

In attempts to reduce the spread of the virus the Chinese Central Government has banned feeding kitchen/restaurant waste to pigs which is a very popular practice in China, and restricted transportation of live pigs and products from infected areas. 

Hogs on the way to market in China.

So far the virus hasn’t mutated to be able to affect humans but it has affected the lives of many humans. Tens of thousands of Chinese farmers are expected to abandon pig farming as weak demand and higher regulation costs cut deep into their profits. It is estimated that will reduce production in China by 20 per cent this year. The weak demand for pork is also affecting global commodity producers with downward pressure on soybeans.This might not be considered a negative affect by the Chinese Central Government which has been pushing for larger factory farms were there can be more control.

David Nealis President of Ceres Ltd

China’s pork industry is US$1 trillion market, not only is China the world’s largest producer of pork and also a net importer of pork. In 2017 it is estimated that China slaughtered 700 million pigs. Yeoman farms producing fewer than 500 pigs for slaughter each year are estimated to account for about 40 per cent of China’s output annually.

During the Year of the Pig let’s hope that the Chinese and other affected regions of the world get the African Swine Virus under control and while they are at it let’s find an intelligent and fair solution to the US - China Trade War as well.

This Old PC Gets a New Life as a NAS

This Old PC

We had an aging PC in our office that ran a version of MS that Microsoft was going to stop supporting so instead of getting rid of it I decided to find a new function for it.

I examined our IT needs and decided that I needed to improve our internal data storage by adding a NAS to the network (NAS – Network Attached Storage).

I made the NAS by:

1) Replaced the hard drive with a new larger drive.

2) The RAM was already sufficient, but it never hurts to add RAM if possible.

3) Installed a copy of Linux on the PC as the Operating System.

4) Updated the BIOs on the PC hardware.

5) Downloaded a copy of Free NAS onto the PC then configured it.

The end product is a NAS with decent processing power that fulfilled the needs of our office. Obviously this won’t work on an Enterprise level, but for our boutique office in Shanghai, China this was a great low cost solution and admittedly a fun project for me.

  

Years ago I wrote another blog post about utilizing an old PC in your small business.

I labeled it “This Old PC part one”, I was living in Shanghai at the time and unfortunately soon after that the Chinese blocked all non-Chinese blogs, the Great Fire Wall of China severely stopped my blogging.

I am spending a little time back in the USA after a decade in China and I am cleaning up an old laptop and I came across some old blogs and I have decided to go ahead and post some of them, though they might be a bit dated I hope they are some value to you.

David Nealis President of Ceres Ltd

In the past if a PC wasn’t up to task for its current role I would clean them up and try to repurpose them while using the old operating system. But in the current age that we live in with additional cybersecurity concerns that is no longer a feasible thing to do, even if this PC isn’t directly connecting to the internet it still is a security risk as hackers scan your network looking for the weakest link. When Miscosoft stops supporting an operating system  it becomes more of a liability on your network because security updates for it  end as well as for third party venders. This makes it a massive security liability on your network.

Previously I wrote about utilizing older PCs for print servers and DNS Servers, but we no longer have any PCs in the office so as I look to the future of my legacy IT equipment my imagination is at work thinking about what can I repurpose those laptops , tablets and smart phones to do.

This brings back memories of a fail project using an old palm pilot to be the brain of a very very simple robot. This makes me hope that I sent that to the e-waste collection place and it’s not rusting away in my basement or garage.

Here are the links to previous tech blogs of mine:

http://davidnealis.blogspot.com/2012/05/this-old-pc-part-one-while-running.html

http://davidnealis.blogspot.com/2011/02/airlink-101-anas350-nas.html

https://davidnealis.blogspot.com/2010/11/mid-irobot-android-tablet-pc.html

China establishes an agricultural credit guarantee

David Nealis in soybean field

China establishes an agricultural credit guarantee company

The Chinese Ministry of Finance has informed us that China has established an agricultural credit guarantee company.

The non-profit firm is a policy guarantee institution which was established by the China Banking Regulatory Commission (CBRC), the Ministry of Finance and Ministry of Agriculture.

The Ministry of Finance has said that the initial funding of the company was more than 4 billion yuan ($611 million), including 3 billion yuan from the State Treasury and the remaining came from 11 provincial-level guarantee institutions that already exist.

They also stated that they expect the capital to increase to 15 billion yuan over the next three years as more organizations join the agricultural credit guarantee company.

According to the Ministry of Finance the goals of the company are to set national re-guarantee business standards, and off re-guarantees to all provincial-level guarantee organizations and developing agricultural credit guarantee products.

We at Ceres expect this to have a positive impact on the Chinese farmer’s cash flow and give some much needed financial relief to small and midsize Chinese farms. 

A Chinese Sugar Option...........Maybe.

A Chinese Sugar Option – the Zhengzhou Commodity Exchange hopes to launch a Sugar Options Contract in 2016.

by Jane Yang, Bob Meara and David Nealis of Ceres Ltd

Over the last 12 months we have seen some major changes in the Chinese capital markets industry including a recent surge in Futures prices in China.

For those of us involved in the Chinese capital markets industry all too often we have heard about potential products being launched and with patience we are still waiting for some of them like the Crude oil contract to be traded in the Shanghai FTZ that potentially would include non-Chinese traders which would be ground breaking in China.

 And we have experienced products and policies being taken away over the last 12 months.

Jane Yang and David Nealis of Ceres Ltd on the CME trading floor

 

In the midst of this comes the hope of a Sugar Options contract launched by the Zhengzhou Commodity Exchange (ZCE).  Currently there is only one options contract traded in China (the World’s 2^nd largest economy), which is the SSE50 ETF option.  

Zhengzhou Commodity Exchange (ZCE) has claimed that they are fully prepared to launch it anytime once they get final permission from CSRC (Chinese Security Regulation Commission.

ZCE is one of the four futures exchanges in China. The products traded in the exchange are mostly agriculture products; wheat, rice, cotton and sugar contracts among others are traded there.
 
For those who don’t trade sugar here is a quick macro picture of sugar around the world:

·         The world top 5 sugar producing countries are Brazil 38.7MT (Metric Ton), India 26 MT, China 11.4 MT, Thailand 10.6 MT and US 7.2 MT.

·         The top 5 importing countries are Philippines, Nigeria, EU, Iran and Iraq.

·         The total annual Sugar production worldwide is 172.5 MT. 

·          Total annual sugar consumption worldwide is 171MT and the total sugar stock worldwide is 42.2 MT. (Year 2015)

ICE No.11 Sugar contract VS ZCE Sugar futures contract

Product	Symbol	Contract Size	Quote	Tick Size	Contract Months	Trading Hours London time	Minimum Trading Margin
ICE Sugar #11	SB	12,000 pounds (5442kgs)	Cents/pound	0.01cent/lb	3,5,7,10	8:30am-6:00pm (London time)
ZEC White Sugar	SR	10 Tons (10,000kgs)	CNY/Ton	1 CNY/Ton	1,3,5,7,9,11	Beijing Time UTC+8 9:00-11:30 a.m. 1:30-3:00 p.m.	6% of contract value

 

 

ICE No.11 Sugar option contract VS ZCE Sugar futures options contract

Product	Symbol	Contract size	Quote	Tick Size	Contract Months	Strike Price intervals	Last trading day	Trading hours
ICE No.11 sugar options	SO	One futures contract	Cents	1/100 of a cent per pound	Regular Options: 1, 3, 5,7,10. Serial Options: 2, 4, 6,8,9,11,12, For the January regular option, the March contract is the underlying future. For serial options, the underlying future is the next Regular futures contract month.	Strike Price Increment will be $.25 cents at all price levels	15th calendar day of the month that precedes the options trading month, or the first business day after the 15th should this day be a weekend or an Exchange holiday.	8:30am-6:00pm (London time)

 

Product	Symbol	Contract Size	Quote	Tick Size	Contract Months
ZCE White Sugar options	SR +C/P + Strick price	1hand of sugar futures contract	CNY/Ton	0.5CNY/Ton	1,3,5,7,9,11
	Expiration Months	Amount of Stick Prices	Strike Price Intervals	Last Trading Day	Trading Hours  UTC+8
	Two months before futures contracts’ delivery months	5 out-of-money, 1 at-the-money and 5 in-the-money according to the price range of exercise price	futures price < 3000RMB,  Strike Price intervals is 50RMB/Ton; 3000RMB7000RMB,  Strike Price intervals is 100RMB; futures price>7000RMB, Strike Price intervals is 200RMB.	Last trading day of the options Expiration Months	9:00-11:30 a.m. 1:30-3:00 p.m.

 

 

 

 

 

Data from ZCE showed in 2015, that the sugar trading volume almost doubled and more than 30% of the trades were physical hedging. According to the their survey,  90% of the big saw sugar producers, 80% of big sugar trading companies, 60% of the large manufacture participated in sugar futures trading hedge their risk.

Most of China’s domestic sugar production is grown in the south of the country, mainly in Guangxi province which produces roughly 70% of China’s domestic sugar production and Yunnan province produces more than 15%.

Hua Tai Chang Cheng Futures forecasts a 22% from 2015 to 2016 total sugar consumption in China. The sugar consumption per Chinese is only 1/3 of the world’s average level, as the Chinese economy continues to grow and the tastes change in China we see a huge potential increase in Chinese domestic demand.  

David Nealis and Bob Meara of Ceres Ltd at the Shanghai Futures Exchange

We are hopeful that is if the contract launches, it will be an active contract.  

We look forward to trading the sugar options contract at China’s Zhengzhou Commodities Exchange.

If you are interested in participating in Chinese financial markets, please contact: info@ceres888.com