Josh Crumb: Global Commodity Outlook & Building ABAXX
Sep 6, 2024
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Join Josh Crumb, a commodities expert passionate about the energy transition and founder of Abaxx Futures Exchange. He shares insights into the evolving landscape of global commodities, particularly the influence of Asia and China. Crumb discusses the mining labor shortage and innovative solutions for trading, touching on transformative technologies that could redefine industry practices. Tune in for captivating discussions on the future of energy markets and the importance of strategic planning in mining investments.
Josh Krum emphasizes the significance of reliable commodity exchanges in stabilizing markets, especially during unexpected dislocations like the nickel trading incident.
The establishment of new benchmarks for battery metals and LNG by Abaxx Tech aims to reflect physical market conditions and improve hedging options.
Krum highlights the impact of environmental considerations on commodity pricing, predicting shifts in demand dynamics and pricing structures based on origin.
Deep dives
Purpose of MacroOps and Community Focus
MacroOps aims to achieve consistent, high risk-adjusted returns while fostering continuous learning among its members. The platform emphasizes building a strong community, primarily composed of professionals and motivated retail investors who share a passion for investing. This unique combination of differentiated research, educational resources, and community support has led to high member retention rates. Members often feel they are part of something special, which enhances their learning experiences and investment outcomes.
Insights from Josh Krum's Background
Josh Krum, the CEO of Abbix Tech, comes from a strong background in commodities and mining engineering. After working at various levels, including engineering design and M&A in the mining sector, Krum transitioned to a role as head metal strategist at Goldman Sachs. This experience equipped him with deep insights into market infrastructure and risk management in the commodities sector. Presently, he leverages this expertise in building a new commodity exchange focused on improving market operations.
Challenges within Commodity Exchanges
The podcast discusses historical challenges faced by commodity exchanges, especially when balancing supply and demand. Particular instances, such as the nickel trading incident that resulted in significant market dislocation, showcased the importance of reliable exchanges that can manage risk effectively. Krum points out that when markets operate predictably, exchanges may seem less critical, but their role becomes vital when unexpected market events unfold. Ensuring that exchanges accurately reflect industry needs helps maintain stability and confidence among traders.
Future of Battery Metals and LNG in Commodity Exchanges
Josh Krum discusses the importance of establishing new benchmarks for battery metals and LNG, reflecting the actual physical market rather than relying solely on cash-settled assessments. The launch of Abbix Tech seeks to address these market needs by offering contracts that provide physical delivery, enabling better hedging options for traders. This approach will allow participants to more accurately manage pricing amidst volatility, ensuring better alignment between contracts and actual market conditions. The creation of a robust exchange also opens prospects for future growth in other commodity applications.
Long-term Views on Global Commodities
Krum shares his long-term outlook on various commodities, emphasizing the need to consider supply chain balkanization and its effects on global markets. He asserts that environmental considerations will drive a differentiation in commodity pricing based on the origin, potentially creating new pricing structures. Specific commodities, like nickel, are expected to see changing demand dynamics due to shifts in production practices and regulatory pressures. Hence, understanding these nuances will help in forming strategic insights about investment opportunities in commodities moving forward.
Josh Crumb talks all things commodities, green energy transition, mining labor shortage, and building Abaxx Futures Exchange.
I hope you enjoy.
Finally, a big thanks to our sponsors for making this episode happen.
Mitimco
This episode is brought to you by MIT Investment Management Company, also known as MITIMCo, the investment office of MIT. Each year, MITIMCo invests in a handful of new emerging managers who it believes can earn exceptional long-term returns in support of MIT's mission. To help the emerging manager community more broadly, they created emergingmanagers.org, a website for emerging manager stockpickers.
I highly recommend the site for those looking to start a stock-picking fund or just learning about how others have done it. You'll find essays and interviews by successful emerging managers, service providers used by MIT's own managers, essays MITIMCo has written for emerging managers, and more!
TIKR
TIKR is THE BEST resource for all stock market data, I use TIKR every day in my process, and I know you will too. Make sure to check them out at TIKR.com/hive.
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