It’s amazing to me to hear some of the ferroalloy sellers already counting their profits based on rising prices. I hate to rain on their parade, but it isn’t real until you make the sale and get paid. It’s sort of like the guys who figure their net worth every day based on stock prices. It’s all theoretical.
Now if the commodity, like nickel or copper, was traded on a terminal market, the seller would be guaranteed the money. No terminal market, not guarantee.
Likewise, even selling forward is tricky since the seller has to assume that when the material is delivered, he will get paid which isn’t always the case, especially in China.
It’s great that prices are moving up, but don’t buy the 200-ft yacht yet.