The dual theme of my A to Z Challenge this year is the world of Commodities and Poetry Forms so the juxtaposition of these two themes may throw up some strange poems – could be a Heroic Ode to Heating Oil or will it merit a Haiku or a Haibun – whichever, I will be endeavouring to bring you interesting facts about commodities that may change the way you think about the stuff we variously depend on…
By commodity I mean certain items that are of both sufficient value/volume to be traded in special markets and are generally volatile enough to attract traders in “Futures” which are a way of hedging bets in the trading world of stocks, shares and commodities.
The A to Z Challenge runs throughout April and will consist of 26 posts – there are only a couple of letters for which I couldn’t find commodities but plenty of poetry forms to carry the day!
World Trade in Nickel (2022) $4.7 Billion
Nickel is a silvery metal which is the fifth most abundant element on Earth. It can occur as a native metal but this is quite rare and often is from the interior of meteorites. More commonly it is found in combination with sulfur and iron in pentlandite, with sulphur in millerite, with arsenic in the mineral nickeline, and with arsenic and sulphur in nickel galena and of course, in many meteorites. The core of the Earth is a Nickel-Iron mix. The chemical and physical properties of Nickel make it extremely useful for many purposes both on its own and in combination with other metals.
“Because nickel ores are easily mistaken for ores of silver and copper, understanding of this metal and of its use is relatively recent. But unintentional use of nickel is ancient, and can be traced back as far as 3500 BCE. Because nickel ores are easily mistaken for ores of silver and copper, understanding of this metal and of its use is relatively recent. But unintentional use of nickel is ancient, and can be traced back as far as 3500 BCE. In medieval Germany, a metallic yellow mineral was found in the Ore Mountains that resembled copper ore. But when miners were unable to get any copper from it, they blamed a mischievous sprite of German mythology, Nickel (similar to Old Nick), for besetting the copper.” (Source Wikipedia)
There are some uses for pure Nickel, but the majority of Nickel is used as alloys (Nickel readily alloys with other metals) because it lends some of its great properties to these metallic combinations. Principal amongst these alloys must be Stainless Steel where Iron, Nickel and Chromium are combined – the nickel adds strength and the chrome gives the self-healing property of stainless steel (Stainless steel can rust but the chromium heals the rust!). Below is an illustration of the many uses of Nickel.
In America, the Nickel is an iconic small denomination coin but even that is nowadays made largely of copper and electro-plated with nickel – another thing that Nickel does very well. So although we do not hear as much about nickel as say, Iron and Steel or Copper, nevertheless Nickel is all around us in many forms and combinations with other metals.
This is a good place to consider the difference between investing in Hard commodities like Nickel, and investing directly in the mines that extract the commodity. This is a complicated question so I decided to ask ChatGPT for advice – you will see from the tabs at the top of this web-page that I have done quite a lot of research into AI this last year and particularly on the word generating side, I have sometimes found it a good starting point for ideas although you need to fact-check its offerings carefully to make sure there are no “hallucinations” present. The answer to this query seems to be very clear and comprehensive and this is what it said:
Direct Exposure vs. Indirect Exposure: Investing in hard commodities like metals involves directly purchasing physical assets such as gold, silver, copper, etc. When you buy shares in a mining company, you’re investing in the company’s business operations, not directly in the underlying commodity. The value of your investment in the mining company is influenced by various factors beyond just the price of the commodity, such as company management, operational efficiency, exploration success, geopolitical risks, etc.
ChatGPT
Risk Profile: Investing in commodities themselves tends to be more straightforward in terms of risk. The value of commodities is primarily driven by supply and demand dynamics, inflation expectations, and currency fluctuations. On the other hand, investing in mining companies introduces additional risks associated with the specific company, such as operational risks, regulatory risks, environmental risks, labor disputes, etc. The performance of a mining company’s stock may not always perfectly mirror the price movements of the underlying commodity.
Leverage and Volatility: Mining stocks can exhibit higher volatility compared to the underlying commodity due to the operating leverage inherent in the business model. In times of rising commodity prices, mining companies can benefit disproportionately as their profit margins increase. Conversely, during downturns, mining stocks can experience amplified losses. Directly holding commodities typically involves less volatility, although it depends on the specific commodity and market conditions.
Dividends and Growth Potential: Mining companies may pay dividends to shareholders, providing income potential in addition to capital appreciation. Furthermore, investing in mining companies offers exposure to potential exploration successes and resource discoveries, which can lead to significant growth opportunities not available when investing directly in commodities.
Diversification: Investing in mining companies provides exposure not only to the price of the underlying commodity but also to the broader equity market. This can offer diversification benefits within a portfolio compared to a concentrated exposure solely to commodities.
And so to today’s poem and the poem form I have chosen for N is the Nonet. In poetry, a nonet is a nine-line poem, with the first line containing nine syllables, the next eight, so on until the last line has one syllable. Nonets can be written about any subject, and rhyming is optional.
So much “modern” poetry is written in free verse and the strictures of form are much relaxed, but in order to write free verse with a poetic voice, it is necessary to exercise the mind with tight forms – just like playing scales on a musical instrument and writing a Nonet is just that kind of exercise…
Nickel – A Nonet
Shiny metal Nickel whose ore was
often confused with Copper
you make Stainless Steel all the
stronger, our world safer
cleaner and brighter
in so many
places we
must give
thanks…
© Andrew Wilson, 2024