[REPLAY] Josh Crumb: Global Commodity Outlook & Building ABAXX

Episode Summary

Executive Summary: Josh Crumb traces his path from mining engineer to Goldman metals strategist to founder of Abix Tech, arguing that commodity markets need better physical-linked infrastructure. He explains why legacy exchanges have drifted from the real supply chain, how Abix is building a full-stack exchange and clearinghouse in Singapore, and why LNG, metals, gold, and future digital-title products could reshape commodity trading.

Main Topics: Josh Crumb’s background and path into commodities (Priority: 5/5): Crumb describes his mining engineering education, early mine-site work, capital markets experience with the Lundines, and transition to Goldman Sachs as head metals strategist, which gave him deep exposure to market plumbing and risk management. Why commodity exchanges matter in physical markets (Priority: 5/5): He argues commodity exchanges are critical when markets are stressed because they function as part of the supply chain, not just a trading venue, and cites delivery mismatches and short squeezes as recurring failures when contracts don’t match physical realities. The legacy of the Lundines and Robert Friedland (Priority: 4/5): Crumb credits great mining investors for long-term thinking, disciplined project selection, patience, and backing visionary teams. He says Friedland’s support for Abix and technologies like iPulse reflects a rare ability to see the future and build toward it. Macro view on commodities, China, and energy transition (Priority: 5/5): He remains constructive on commodities over a 5–10 year horizon, citing Asian industrialization, coal-to-gas switching, and rising middle-class energy demand. He notes short-term cyclicality but argues the long-term demand picture remains strong. Abix’s exchange model and launch strategy (Priority: 5/5): Abix is presented as a ground-up, full-stack exchange and clearinghouse, built around physical delivery and direct connection to commercial users. Its first products are LNG and carbon contracts, with battery metals and gold next. Market structure, liquidity, and the decline of specialist capital (Priority: 4/5): Crumb says both commodity markets and small-cap resource markets suffer from the disappearance of deep, specialist capital that used to make markets and hold volatility. Momentum-driven flows dominate, weakening price discovery. Gold, silver, and the shift East in precious metals (Priority: 4/5): He sees gold market structure moving from London/Western banking toward Asia, with kilo bars and Singapore becoming more important. Silver is viewed as more complex because investment demand must eventually force primary supply economics.

Key Arguments: Commodity exchanges are not just trading venues; in stressed periods they become part of the physical supply chain and risk-management system. Misaligned contracts create repeated dislocations, as seen in LME nickel and historical examples like potatoes and Texas hedges. Great mining capital allocators succeed by focusing on first principles, best projects, best teams, and long-term patience rather than financial engineering. Commodity markets are still fundamentally driven by demographics and energy, especially Asia’s continued industrialization and coal-to-gas transition. Legacy exchanges have become detached from physical markets, relying too much on surveys and cash-settled benchmarks rather than delivery-linked contracts. Abix’s advantage is building infrastructure from scratch around physical delivery, central clearing, and eventual digital title transfer to reduce financing friction. Natural gas price may not be the main bullish trade; the real opportunity is the infrastructure and market plumbing that allow global energy switching. Market structure has changed: banks and large macro funds no longer warehouse volatility the way they did a decade ago, reducing reflexive price discovery. Gold is shifting eastward as physical flows, central-bank buying, and regional market infrastructure move toward Asia-based kilo-bar trading. Silver likely needs stronger investment demand to push the market from byproduct supply into incentivizing new primary mine supply. A key contrarian idea is that supply chains are becoming balkanized, creating origin-based price differentials and “green premiums” that are not yet fully priced in.

Data Points: Abix launch build time: about 5.5 years - Crumb says the exchange took roughly five and a half years to build before its June 28 launch. Initial contracts launched: 5 contracts - Abix launched with three LNG contracts and two carbon contracts. LNG contracts launched initially: 3 contracts - One Gulf of Mexico FOB contract and two demand-side regas contracts for Northwest Europe and Northeast Asia. Carbon contracts launched initially: 2 contracts - Part of Abix’s first batch of listed products. US liquefaction capacity growth since pre-COVID: about 60% to 70% - Crumb says U.S. LNG liquefaction capacity has expanded substantially since before COVID. North American LNG capacity growth by 2028/2029: set to double again - He expects North American LNG capacity to roughly double by the late 2020s. LNG-Europe hedge mismatch in 2022: almost $8 per MMBtu - He cites the spread between LNG regas pricing and TTF during the European gas spike. Gold market balance-sheet risk at Goldman: sub-20 million - Crumb says Goldman’s commodity and fixed income risk on balance sheet had fallen to very low levels, citing a quarterly figure under $20 million. WTI market enterprise value reference: about $5 billion - He estimates major commodity benchmarks can be worth billions to exchange operators. Gold price reference: 2,500 - He refers to gold being around $2,500 when discussing silver and precious metals flows. Oil downside price-war scenario: $45 to $50 per barrel - He suggests this would be an extreme downside if a true commodity price war emerged.

Pivotal Quotes: "There’s really no such thing as a greenfield exchange." — Josh Crumb: He explains that building a new exchange from scratch is unusually hard because legacy exchanges often evolved from older market structures. "By definition, a commodity needs to be produced, transported, stored before it’s consumed." — Josh Crumb: Used to explain why physical delivery and supply-chain integration are essential in commodity markets. "Laws come from physics and everything else is a suggestion." — Josh Crumb: He frames his macro worldview around energy, demographics, and physical constraints rather than purely financial narratives.

Implications: The conversation suggests commodity markets are entering a new infrastructure phase: more physically linked, Asia-centered, and technologically enabled. If Abix succeeds, exchanges may shift from cash benchmarks toward delivery, digital title, and broader access to new commodity-like assets.