An agent is a person who has been legally empowered to act on behalf of another person or an entity. An agent may be employed to represent a client in negotiations and other dealings with third parties. The agent may be given decision-making authority.

An agent may be authorized to represent a client in negotiations and other dealings with third parties or may have decision-making authority. 

The person represented by the agent in these scenarios is called the principal. 

Air Waybill (AWB)

An air waybill (AWB) is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked. The bill has multiple copies so that each party involved in the shipment can document it. An air waybill (AWB), also known as an air consignment note, is a type of bill of lading. However, an AWB serves a similar function to ocean bills of lading, but an AWB is issued in non-negotiable form, meaning there's less protection with an AWB versus bills of lading.


Aluminium oxide, also called alumina, is the raw material required to produce primary aluminium. It is a white powder produced by the refining of bauxite.


The simultaneous purchase and sale of an asset to profit from a difference in the price. It is a trade that profits by exploiting the price differences of identical or similar financial instruments on different markets or in different forms.


An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. Assets are reported on a company's balance sheet and are bought or created to increase a firm's value or benefit the firm's operations. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales, regardless of whether it's manufacturing equipment or a patent.  



Is the scenario where the spot price of a commodity is higher than the futures price of the same commodity. This situation arises under abnormal conditions such as shortage of supply of a commodity in the short term.

Bank Guarantee

A bank guarantee is a type of financial backstop offered by a lending institution. The bank guarantee means that the lender will ensure that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. A bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down a loan.


Barter is an act of trading goods or services between two or more parties without the use of money —or a monetary medium, such as a credit card. In essence, bartering involves the provision of one good or service by one party in return for another good or service from another party.


The main raw material for aluminium metal production. Bauxite deposits are mainly found in a wide belt around the equator.

Benchmark (metals)

A benchmark is a measurement of the price per unit of quantity of the underlying commodity traded in the international marketplace. It is set periodically by the country or through negotiation between the major producer and consumer organisations that consistently sell or buy large quantities of the commodity in a marketplace, and is used to serve as a point of reference against which sectors can be evaluated. 

Bill of lading (BL) 

A document issued by the master of a ship when loading is completed. This acts as receipt for the goods, document of title to the goods and evidence of the contract of carriage. The rightful receiver of the cargo presents the BL to claim it at the discharge port.

Blister copper

An impure form of copper produced in a furnace.


A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower.


The fuel used by ships. The term for fueling a ship is bunkering. 


Quality spread

The difference in price between different grades of a commodity deliverable on the same date at the same location. The higher grade commodity will normally trade at a premium. 


CFR – Cost and Freight

The seller delivers the goods on board the vessel. The risk of loss of or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.


A company in the charter party that hires a ship and its crew for a single voyage or for a fixed period. 

Charter party (CP) 

A contract to charter a vessel. 

CIF – Cost, Insurance and Freight

The same as CFR with the addition that the seller must also obtain minimum insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.

CIP – Carriage and Insurance Paid to (named place of destination)

Similar to CPT with the exception that the seller is required to obtain minimum insurance for the goods while in transit.

Client Standards:

Minimum technical and commercial requirements established by the client.


The tradable commodity created by initial processing of lead, zinc or copper ore. Concentrates are used as raw materials by smelters to produce refined metals.


An ultralight oil found in huge quantities in shale deposits. When underground it is mostly in gaseous form. It condenses into a liquid when pumped to the surface. 

Copper cathode

A 99 percent pure form of copper – the primary raw material for copper wire and cable. 


The opposite party in a contract or financial transaction. 

CPT – Carriage Paid To (named place of destination)

Under CPT the seller pays for the carriage of goods up to the named place of destination. 


DAP – Delivered at Place (named place of destination)

The seller is deemed to have delivered when the goods are placed at the disposal of the buyer on the arriving means of transport and ready for unloading at the named place of destination. Under DAP terms, the seller needs to manage all risks involved in bringing the goods in.

DDP – Delivered Duty Paid (named place of destination)

The seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. 

Deadweight tonnage (DWT)

The cargo-carrying capacity of a vessel, in metric tonnes, plus the weight of bunkers, stores, lubes, fresh water, etc. It does not include the weight of the ship.


The compensation paid by charterers to the owners of a vessel for extra time used at the port, beyond what has been granted under the charter. 

DPU – Delivered at Place Unloaded (named place of destination)

This Incoterm requires that the seller delivers the goods, unloaded, at the named place. The seller covers all the costs of transport (export fees, carriage, unloading from main carrier at destination port and destination port charges) and assumes all risk until arrival at the destination place.


EXW – Ex Works (named place of delivery)

EXW means that the seller makes the goods available at their premises or at another named place (works, factory, warehouse etc). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export. 


FAS – Free Alongside Ship (named port of shipment)

The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer takes on responsibility for all costs from that moment onwards.

FCA – Free Carrier (named place of delivery)

FCA can have two different meanings, each with varying levels of risk and cost for the buyer and seller. FCA (a) is used when the seller delivers the goods, cleared for export, at a named place which is their own premises. FCA (b) is used when the seller delivers the goods, cleared for export, at a named place which is not their premises. In both instances, the goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer.

FOB – Free on Board

The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods pass over the ships rail, and the buyer takes on responsibility for all costs from that moment onwards.


Guarantee Deposit

Guarantee bonds required by the client to guarantee the seriousness of the offer.



Stands for international commission for uniform method of sugar analysis which deals with purity and color specifications


International commercial terms are trade terms published by the International Chamber of Commerce (ICC). They are commonly used to ease domestic and international trade by helping traders to understand one another.


Invitation to Tender, Invitation done by a client, in which the Administrative and Technical Bases, scope and other requirements are provided  by the Client for the preparation of the proposal. issued to Suppliers of Good and/or Services



Means all national (or state) legislation, statutes, ordinances and other laws, and regulations and by-laws of any legally constituted public authority.


The amount of time in port granted by the owners of the vessel, as stated in the charter party, for the loading and discharging of cargo. 

Letter of credit (LC)

A document from a bank guaranteeing that the seller will receive payment in full, as long as certain delivery conditions have been met.

Letter of indemnity (LOI) 

A guarantee that losses will not be suffered should certain provisions of a contract not be met. If a BL is not available, then a letter of indemnity is submitted to the owners for the delivery of the goods instead. 

Letter of Intent (LOI)

A letter of intent or letter of comfort is the commitment to do or not to do, the purpose of which is to support a debtor in the performance of his obligation towards his creditor.

London Metals Exchange (LME)

A commodities exchange in London, England, that deals in metal futures. Contracts on the exchange include aluminium, copper and zinc. The LME is a non-ferrous exchange, which means that iron and steel are not traded on the exchange. 


Middle distillates

The range of refined products situated between lighter fractions, such as gasoline, and heavier products, such as fuel oil. They include jet fuel, kerosene and diesel. 


Infrastructure that provides alternative transportation modalities for commodities, e.g. road, rail and river. 



A flammable liquid made from distilling petroleum. It is used as a diluent to help move heavy oil through pipelines and as a solvent. 

National oil company

(NOC) An oil company fully or in the majority owned by a national government. 


Offtake agreement

A long-term supply agreement where a trader agrees to buy a fixed quantity or proportion of a resource producer’s future output at a specified price. 



Parent Company Guarantee undertaking from a parent company of the seller (e.g.mother company) – not a bank, a bonding company - to secure performance of the contract by its direct or indirect subsidiaries (or other affiliated companies).

Posted pricing

A posted price is set by a government or national company where the price is set for a fixed period of time and only reviewed by that price-setting body.

Premium / discount

Applied to benchmarks, being the addition or subtraction in price over or under a reference price negotiated between physical trading partners for a specific product, delivery location and date. 


Quality spread

The difference in price between different grades of a commodity deliverable on the same date at the same location. The higher grade commodity will normally trade at a premium. 



A restricted refining process that splits condensate into various products, including naphtha and distillates. 

Spot price

The current market price at which a commodity is bought or sold for immediate payment and delivery. 


Standby letter of credit (or standby credit) are guarantee instruments, very similar to bonds which provide security for performance of the underlying obligation (payment of a specified amount if the debtor fails to perform a contractual obligation) and will be payable following a demand coupled with the necessary documents specified in the standby letter of credit.


Time charter

Hiring a vessel for a fixed period. The owner manages the vessel but the charterer specifies journeys, fuel, port charges, etc. 

Time spread

The difference in price between a commodity delivered on a particular date and the identical commodity deliverable on a different date. Also known as calendar spread. 

Treatment charge (TC) and Refining charge (RC)

TC / RC are amounts designed to cover the cost incurred by the smelter during the smelting and refining process, whereby the treatment costs occur during the smelting process to extract metal from the ore and the refining costs occur during further purification to pure metal where all undesirable by products are removed. They are negotiated fees that may be linked to metal prices as well as market supply and demand, and in the concentrates business are usually paid by the seller to the buyer. 

The Steel Index (TSI)

The steel index is a specialist provider of price information for key steel, iron ore, ferrous scrap and coking coal products around the world, based on spot market transaction data. 


Voyage charter

Hiring a vessel for a specific voyage between a load port and a discharge port. The charterer pays the vessel owner on a per-tonne or lump-sum basis. The owner pays port costs, excluding loading and unloading, as well as fuel and crew costs.