The Nickel Broker Quoted a Price. It Was Not a Price.
Quote from chief_editor on May 21, 2026, 3:30 pmA soft quote from a commodity broker is not an offer. The difference between soft and firm has legal and commercial consequences brokers rarely explain.
A nickel cathode buyer receives a message from a broker: "Available: 500 MT LME Grade A nickel cathodes, CIF Rotterdam, estimated price in the range of LME + $150-180/MT, prompt shipment." The buyer sees a price. They begin planning their inventory. They start internal approval processes. They come back two days later ready to proceed.
The broker tells them the cargo is no longer available. Or the price has moved to LME + $220. Or the seller needs to confirm the shipment date. Or the seller is now talking to another buyer.
None of this is fraud. The original message was a soft quote — an indication of potential availability at a range of prices, subject to principal confirmation. It was not a firm offer. It created no binding obligation on the seller, on the broker, or on anyone. The buyer's reliance on it as the basis for internal planning was an assumption the buyer brought to the message without the message supporting it.
Soft Quotes Are Information, Not Offers
In the legal sense, an offer is a statement that, if accepted, creates a binding contract. A firm offer in commodity brokerage means the seller has authorized the broker to present the cargo at a specific price, for a specific quantity, with specific terms, and the offer remains open for a defined period — sometimes 24 hours, sometimes less. Acceptance by the buyer within that period creates a contract.
A soft quote is none of these things. It is market intelligence: this is approximately what is available at approximately what price, subject to verification. The broker who sends a soft quote is not authorized by the seller to conclude a transaction. They are testing market interest. If a buyer responds positively, the broker goes back to the seller to confirm whether the cargo is actually available, whether the price is actually achievable, and whether the terms are actually as described.
This distinction matters for a specific reason: buyers who plan around soft quotes and then find the cargo unavailable or more expensive incur real costs. Internal approval processes were initiated. Alternative suppliers were turned away. Hedging positions may have been established. None of these costs are recoverable from the broker or the seller — because the soft quote created no obligation.
Industry estimates suggest that in physical commodity brokerage, the majority of initial inquiries and quotes circulated are soft — that is, unconfirmed by the principal. The proportion of firm offers in the total information flow is substantially lower. Buyers who do not understand this ratio and treat all broker communications as offers are consistently surprised when cargo they thought they had secured turns out not to be secured.
The Commission Gap
A second misunderstanding in commodity brokerage involves commission entitlement. Brokers who introduce buyers to sellers, facilitate the commercial discussion, and are present when the parties agree on terms often believe their commission entitlement is established at that point. In many cases, it is not — or not securely.
Commission agreements in commodity brokerage are frequently informal: a percentage or flat amount agreed verbally or by email, without a formal written brokerage mandate. When the trade closes smoothly and both parties are satisfied, commission gets paid without issue. When a dispute arises between buyer and seller, or when one party decides to continue trading directly without the broker, the broker's claim on commission depends entirely on what their mandate says and what jurisdiction's law applies to enforceability.
Brokers who have been working a relationship for months — providing market intelligence, facilitating introductions, developing trust between buyer and seller — and then find themselves excluded from the resulting transaction have limited legal recourse without a written mandate that clearly defines their role, their entitlement, and the duration of their protection against being circumvented.
The gap between a broker's commercial expectation and their legal position is the space where most commodity brokerage disputes live. Understanding that gap requires reading the documents that govern the relationship — which, in many cases, do not exist in writing at all.
A soft quote from a commodity broker is not an offer. The difference between soft and firm has legal and commercial consequences brokers rarely explain.
A nickel cathode buyer receives a message from a broker: "Available: 500 MT LME Grade A nickel cathodes, CIF Rotterdam, estimated price in the range of LME + $150-180/MT, prompt shipment." The buyer sees a price. They begin planning their inventory. They start internal approval processes. They come back two days later ready to proceed.
The broker tells them the cargo is no longer available. Or the price has moved to LME + $220. Or the seller needs to confirm the shipment date. Or the seller is now talking to another buyer.
None of this is fraud. The original message was a soft quote — an indication of potential availability at a range of prices, subject to principal confirmation. It was not a firm offer. It created no binding obligation on the seller, on the broker, or on anyone. The buyer's reliance on it as the basis for internal planning was an assumption the buyer brought to the message without the message supporting it.
Soft Quotes Are Information, Not Offers
In the legal sense, an offer is a statement that, if accepted, creates a binding contract. A firm offer in commodity brokerage means the seller has authorized the broker to present the cargo at a specific price, for a specific quantity, with specific terms, and the offer remains open for a defined period — sometimes 24 hours, sometimes less. Acceptance by the buyer within that period creates a contract.
A soft quote is none of these things. It is market intelligence: this is approximately what is available at approximately what price, subject to verification. The broker who sends a soft quote is not authorized by the seller to conclude a transaction. They are testing market interest. If a buyer responds positively, the broker goes back to the seller to confirm whether the cargo is actually available, whether the price is actually achievable, and whether the terms are actually as described.
This distinction matters for a specific reason: buyers who plan around soft quotes and then find the cargo unavailable or more expensive incur real costs. Internal approval processes were initiated. Alternative suppliers were turned away. Hedging positions may have been established. None of these costs are recoverable from the broker or the seller — because the soft quote created no obligation.
Industry estimates suggest that in physical commodity brokerage, the majority of initial inquiries and quotes circulated are soft — that is, unconfirmed by the principal. The proportion of firm offers in the total information flow is substantially lower. Buyers who do not understand this ratio and treat all broker communications as offers are consistently surprised when cargo they thought they had secured turns out not to be secured.
The Commission Gap
A second misunderstanding in commodity brokerage involves commission entitlement. Brokers who introduce buyers to sellers, facilitate the commercial discussion, and are present when the parties agree on terms often believe their commission entitlement is established at that point. In many cases, it is not — or not securely.
Commission agreements in commodity brokerage are frequently informal: a percentage or flat amount agreed verbally or by email, without a formal written brokerage mandate. When the trade closes smoothly and both parties are satisfied, commission gets paid without issue. When a dispute arises between buyer and seller, or when one party decides to continue trading directly without the broker, the broker's claim on commission depends entirely on what their mandate says and what jurisdiction's law applies to enforceability.
Brokers who have been working a relationship for months — providing market intelligence, facilitating introductions, developing trust between buyer and seller — and then find themselves excluded from the resulting transaction have limited legal recourse without a written mandate that clearly defines their role, their entitlement, and the duration of their protection against being circumvented.
The gap between a broker's commercial expectation and their legal position is the space where most commodity brokerage disputes live. Understanding that gap requires reading the documents that govern the relationship — which, in many cases, do not exist in writing at all.