Trust Erodes When the Cargo Is Rubbish: The Trafigura Nickel Affair

The global commodity markets are no stranger to controversy. But when a firm as large as Trafigura finds itself facing several major legal battles simultaneously, the industry must take note. One concerns an alleged fraud involving nickel shipments worth about $600 million; another involves a landmark bribery conviction. A third centres on the long-running dispute related to Nyrstar, in which Trafigura has faced allegations over its role in the company’s financial collapse. Together with other conflicts that remain more under the radar, these cases raise difficult questions about governance, transparency and the nature of risk in trading houses.

The Nickel Case: Costly Cargoes Masking Worthless Material

In November 2025 Trafigura brought a lawsuit before London’s High Court against Indian businessman Prateek Gupta and his companies, alleging a systematic scheme in which cargoes presented as high grade nickel contained only low value materials such as iron briquettes or scrap steel.

The five week trial focuses on claims that Trafigura paid roughly $500 million for purported nickel shipments and later realised as little as $10 million from disposing of what it allegedly actually received.

Mr Gupta denies orchestrating any fraud. Instead, he alleges that senior Trafigura staff themselves engineered the scheme to enhance the company’s nickel trading profile. He further claims that the Trafigura employee who allegedly set up the fraud told him that Jeremy Weir, Trafigura’s CEO at the time was aware of, and had even approved, the arrangement.

Questionable Dealings and Internal Warning Signs

The Indian businessman is hardly a spotless figure. Mr Gupta’s name surfaces regularly in connection with possible wrongdoing. Even though Trafigura knew exactly whom it was dealing with and was aware of Gupta’s desperate need for financing and the reluctance of many banks to provide it, it proceeded with the highly suspicious transactions, apparently driven by the prospect of short-term profit. And this despite severe warning signals from its own internal risk department.

Such questionable business arrangements that are pushed through against internal control mechanisms, supported by top management and surrounded by strict confidentiality arrangements, are common practice in the commodity trading industry, a sector not especially noted for transparency and ethical conduct.

A Pattern of Controversy and Market Integrity Concerns

Trafigura itself carries a long record of scandals that continue to shadow its operations – birds of a feather flock together. In January 2025 a Swiss criminal court convicted Trafigura and its former Chief Operating Officer, Mike Wainwright, of paying bribes to an Angolan oil official in exchange for contracts between 2009 and 2011. It marked the first time in Switzerland that a major commodity trader was convicted for the corruption of a foreign public official, although the case remains subject to appeals.

These events draw attention to broader questions about market integrity, namely that Trafigura staff allegedly misled the nickel market echo concerns that were raised in relation to alleged misleading market communications and market manipulation in the Nyrstar case on the Brussels stock exchange.

Although entirely separate matters, the parallels underline how trust can erode when information asymmetries widen and transparency is contested. Notably, the Nyrstar-related events occurred around 2019, coinciding in timing with the alleged fraudulent nickel scheme now being tried in London, a juxtaposition that further shapes perceptions within the market.

Why These Controversies Matter: Risk and Opacity

All these cases involving Trafigura revolve around the same underlying issue: risk slipping out of sight. In the nickel case, it is the risk that shipments were allegedly not what they were claimed to be. In the Angola case, the risk of opaque intermediaries and contracts accumulating until they collapsed into scandal. In the Nyrstar case, the risk that insufficient transparency enabled a manufactured liquidity crisis that allowed the acquisition of company assets for pennies on the dollar.

It may be tempting to view the nickel affair as an isolated incident. But when considered alongside the bribery conviction in Switzerland, and the heavily contested and litigated asset transfer of Nyrstar to Trafigura: a broader pattern appears: a trading house repeatedly operating in alleged grey zones of conduct.

The trial in London is being watched closely, not only by the parties involved but by the entire commodity ecosystem.

To be continued.

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