Bloomsbury’s Origins

Although Bloomsbury is now a diversified investment group, it was much more specialised in origin.

In 1993, BME was formed by Peter Hollands and Barbara Sotowicz and it launched the “Copper Briefing Service”, a 12-page monthly report in easy-access newsletter style but with rigorous forecasts two years ahead of mine, smelter & refinery production, and refined consumption, country-by-country and globally, market balance and stocks, prices, plus treatment & refining charges (TC/RCs) for custom concentrates (copper in ore minerals) and RCs for blister (unrefined) copper. That was a level of analysis which BME supplied monthly but which competitors mostly only provided in quarterly or annual reports.

In 2001, Adam Sotowicz began BME’s mathematical modelling of the cash prices and (uniquely at the time, we believe) forward spreads of copper, nickel, aluminium, zinc, lead and tin. Price drivers were the rate of global industrial production (IP) growth (based on a superb data series by CHR), LME stocks, exchange rates and, for the spreads, also interest rates. At that time, there were two quite separate schools of thought on base metal prices. For price drivers, single-metal specialists mostly followed market balances and stocks, while many multi-commodity analysts believed in turning points in the global IP cycle. Adam’s models provided a breakthrough: they showed that it was the interaction between IP growth rates and stock levels that drove both prices and spreads – a unified theory of price.

That insight brought great clarity and accuracy to BME’s forecasting of LME cash prices and forward spreads. At the request of a Hedge Fund, a subsidiary, BME Price Models (BME PM), was set up in 2004 to provide traders with fundamentals-based models of prices and spreads for the LME metals, as well as Expert Systems that incorporated ‘Quant’ techniques to complement traditional technical analysis. From 2005, BME PM also became the first company to incorporate into its fundamentals-based models the impact of the financial community’s new investment vehicles in physical metals, futures and options, which introduced long-side bias to the market: a price bubble. The financial community’s long positions in commodities rose from $75 Bn in 2005 to $400+ Bn in 2012.

BME Price Models’ hedge fund advisory work was very successful and profits were re-invested in minority holdings initially in a number of information businesses related to metals and mining. Bloomsbury then gradually exited from its own market analysis publishing operations.

Once a portfolio of sustainable / regenerative and SaaS investments has been brought together, a return by BME to ore and metal price analysis is possible, perhaps in the second half of 2023.

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