Strategic Minerals Brokerage Vocabulary

Vocabulary and specification flashcards covering core concepts, execution terms, formulas, and exchange product details from the Strategic Minerals Brokerage Master Manual.

CORE

Mechanics that change infrequently and should be memorized.

CHECK

Rules or specifications that should be verified periodically.

LIVE

Dynamic fields such as margins, open interest, bid/ask, warehouse stocks, market-maker depth, curves, and regulatory notices that must be refreshed before a client conversation or execution.

Commodity Exposure vs Benchmark Exposure

Commodity exposure describes the broad physical material, whereas benchmark exposure is the specific portion of the commercial price linked to a price reference that a derivative may hedge.

Basis

The difference between the physical price of a commodity and the hedge benchmark price.

Minimum-Variance Hedge Ratio Formula

The statistical hedge ratio calculated as $h^* = \frac{\text{Cov}(dS,dF)}{\text{Var}(dF)} = \rho \times \frac{\sigma_S}{\sigma_F}$.

Prompt Date

The settlement or delivery date of an LME position.

Carry

A transaction involving the simultaneous buy and sell of different prompts to roll exposure through time and price the forward curve.

Contango

A market structure where farther-dated or forward prices are higher than nearby prices.

Backwardation

A market structure where nearby prices are higher than farther-dated prices.

Warrant

An electronic title or claim to eligible LME-approved metal stored in an approved warehouse.

Cancelled Warrant

An LME warrant earmarked for withdrawal rather than freely available on-warrant stock.

TAPO

Traded Average Price Option; an Asian-style option settled against an average of official prices.

MAF

Monthly Average Future; a cash-settled futures contract that settles against a monthly average settlement price.

CME UX (UxC Uranium Futures)

Financially settled futures contract with a size of $250\,\text{lb } \text{U}_3\text{O}_8$ and a tick size of $\\$0.05/\text{lb} = \\$12.50/\text{contract}$ based on the monthly arithmetic average of weekly UxC spot prices.

CME LTH (Lithium Hydroxide CIF CJK)

Financially settled futures contract for $1,000\,\text{kg}$ of battery-grade lithium hydroxide, quoted in USD/kg with a minimum price tick of $\\$0.01/\text{kg} = \\$10/\text{contract}$.

CME SPM (Spodumene CIF China)

Financially settled futures contract with a size of $10\,\text{metric tonnes}$ and a tick size of $\\$1/\text{t} = \\$10/\text{contract}$, referenced to Fastmarkets spodumene min 6% $\text{Li}_2\text{O}$ CIF China.

CME COB (Cobalt Metal)

Financially settled futures contract for $2,204.62\,\text{lb}$ ($1\,\text{metric tonne}$) based on the monthly average Fastmarkets standard-grade cobalt in-whs Rotterdam low-end assessment.

CME COH (Cobalt Hydroxide)

Financially settled futures contract with a size of $2,204.62\,\text{lb}$ ($1\,\text{metric tonne}$) of cobalt content reference.

CME MOX (Molybdenum Oxide)

Financially settled futures contract for $1,322.77\,\text{lb}$ contained molybdenum, settled against Platts Molybdenum Oxide Daily Dealer Global.

LME NI (LME Nickel)

Physically settled nickel futures contract with a lot size of $6\,\text{metric tonnes}$ and an outright Ring/LMEselect tick of $\\$5/\text{t} = \\$30/\text{lot}$.

LME SN (LME Tin)

Physically settled tin futures contract with a lot size of $5\,\text{metric tonnes}$ and an outright Ring/LMEselect tick of $\\$5/\text{t} = \\$25/\text{lot}$.

LME MD (LME Molybdenum)

Cash-settled molybdenum futures contract with a lot size of $2,205\,\text{lb}$, settled against Platts Molybdenum Oxide Daily Dealer Global.

MHP

Mixed Hydroxide Precipitate; an intermediate product containing nickel and cobalt commonly produced via HPAL.

NPI

Nickel Pig Iron; a lower-purity ferronickel stainless steel raw material typically produced from laterite ore.

HPAL

High Pressure Acid Leach; an advanced hydrometallurgical route for processing laterite ores into nickel/cobalt intermediates like MHP.

RKEF

Rotary Kiln Electric Furnace; a pyrometallurgical processing route for converting laterite ore into NPI/ferronickel.

SWU

Separative Work Unit; a standard statistical measure of enrichment effort required to separate uranium isotopes, distinct from physical uranium weight.

U3O8

Triuranium octoxide; standard uranium concentrate commonly referred to as yellowcake.

UF6

Uranium hexafluoride; the chemical compound created during conversion and used in the enrichment stage of the nuclear fuel cycle.

FeMo

Ferromolybdenum; an alloy product composed of iron and molybdenum used to add molybdenum to steel.

LFP

Lithium iron phosphate; a battery cathode chemistry that generally excludes nickel and cobalt.

Li2O

Lithium oxide equivalent; the standard chemical reference unit used to grade and measure spodumene concentrates.

AP

Associated Person; a regulated role under U.S. futures industry regulatory framework.

Block Trade

A privately negotiated eligible derivative transaction executed away from the public order book and reported under exchange block trading rules.

EFRP

Exchange for Related Position; an umbrella rule mechanism permitting futures positions to be exchanged against eligible related physical or swap positions.

FCM

Futures Commission Merchant; an entity that carries customer futures accounts and handles clearing.

PRA

Price Reporting Agency; independent entities (e.g., Fastmarkets, UxC, S&P Global Commodity Insights/Platts) that collect market data and publish benchmark assessments.

Quotation Period

The specific contractually defined time window during which benchmark prices are averaged or sampled to fix a physical contract's price.

TC/RC

Treatment charge / refining charge; fees paid to processors and smelters to convert raw mineral concentrates into refined metal.