Why bet against nickel when you have a nickel business? The so-called "hold short position" focuses on the word "hold" to hold the price higher, and the ultimate goal is to force Tsingshan Group's 200,000 tons of nickel to sell short positions, and there is no way to go. Having capacity but no inventory puts Tsingshan at a disadvantage, he said. When Norilsk Nickel left the Western markets, Glencore became its main substitute for nonferrous metals. Xiang isnt just a financial trader making paper bets on price moves. Including positions on the London Metal Exchange and bilateral bets with banks, Xiang still has short holdings in the region of 150,000 tons, the people said. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. In theory, there should be two options for this 200,000 tons of nickel short order: 1. A market that many veterans simply describe as "broken." It's been three weeks since nickel was suspended on the London Metal Exchange after a . Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. Already at an all-time high by 5:42 a.m., it lurched higher in stomach-churning leaps, soaring $30,000 in a matter of minutes. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. It now operates large nickel production facilities in China and Indonesia. Some aggrieved traders are already preparing to take legal action against the exchange. The difference is that nickel is a commodity that touches the entire global economy. I see all automakers within a short time creating their own 4680 . A year after the short squeeze that brought the LME to the brink of collapse, the nickel market remains barely functional, with trading volumes sharply lower and prices regularly experiencing wild . Shanghai's most-traded nickel futures contract . One thing is sure: If Xiang can weather the storm, Tsingshans nickel producing assets stand to benefit from the higher prices, offsetting losses from the short. Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. Tsingshans were even larger, numbering about $US3 billion, according to a calculation based on its total short position which, even after Xiang had closed out a portion of the bet in previous weeks, was over 150,000 tonnes. Glencore plc was newly . Hes in the physical nickel business. Chinese nickel heavyweight Tsingshan Holding Group was looking at an $8 billion trading loss after nickel prices suddenly exploded higher following Russia 's invasion of Ukraine, The Wall Street . Glencore UK Ltd, Izimbiwa Coal (Pty) Ltd, Katanga Mining Limited, Kazzinc Ltd., Koniambo Nickel S.A.S., Magdeburg, Mangoola Coal Operations Pty Limited, McArthur River Mining Pty Ltd, Minera . Nickel prices usually move a few hundred dollars per ton in a day. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. In theory, any price changes on the futures market should offset price changes in the value of the inventories as long as the traders can meet their margin calls. Tsingshan mostlymakesstainless steelthat isused inthepetroleum, chemicals, auto,and other fields. We had a frenzy based on speculation that accelerated on Monday and Tuesday. For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. Inability to deliver the products was a big problem for Tsingshan, the analyst added, noting that the company has nickel iron, stainless steel, and nickel matte but noelectrolytic nickel, which is the type traded on the LME. Its unclear whether he will get his way. Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. . Rio Tinto, the world's second-largest mining company by market capitalization, last week said it would lift annual capital investment to as much as $10 billion in 2024 and 2025, up around 25% on . As at January 31, 2023 Glencore holds 72,008,404 Common Shares, representing approximately 70.8% of the issued and outstanding Common Shares. The nickel market was anything but calm. Several large brokers got margin calls of close to $US1 billion each over the course of the day. Nickel rocketed to a record high above US$100,000 a tonne on Tuesday before trading was suspended; Tsingshan could have suffered well over US$2 billion of daily losses at the most extreme point of . That put Tsingshans banks and brokers, which includeJPMorgan Chase,BNP Paribas, andStandard Chartered,in a bind. If you don't see the email, check your junk, spam or other folders. Short Interest; Premarket Screener . Tsingshan Holding Group was looking at an $8 billion trading loss after nickel prices soared, The Wall Street Journal reported Tuesday . Some traders and bankers have questioned whether a producer like Tsingshan, which has relatively low production costs and is active in all parts of the supply chain, really needs such a large hedging position. 92 000 MT. Those past scandals forced reforms on the exchange. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Its not just a casino.. 5 000 MT. He started increasing his short position on the London Metal Exchange. Certain sections of this system have been patented. Those past scandals forced reforms on the exchange. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its Covid-era low. They include: Koniambo is a large-scale integrated ferronickel mining and processing complex. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. Production 2019. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. Tsingshan has recently threatened in Chinese domestic media to deliver physical metal to the LME, a strong-arm tactic that analysts say would push prices back down. Its participants are a mix of the industrial metals companies, which tap the market to offset their price risks, and hedge funds, which use it to speculate. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. 1w. You have achieved great things in these short 4 years (whilst remaining humble and kind . The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. By Lucy Battersby. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . Just after 6 a.m., the price of nickel passed $100,000 a ton. The two major mining companies in Sudbury are working together to . Tsingshan needs to increase the contract margins or roll over the futures if it decides to keep the contracts, which would require a huge amount of cash, an analyst told Yicai Global. Its not just a casino. Summary. 2023 Glacier Media Group, All Rights Reserved. Tsingshan accounted for about half that amount. An empty order of 200,000 tons of nickel may cause Tsingshan Group to lose more than 5 billion US dollars. Their GLEN share price forecasts range from GBX 540 to GBX 740. Formerly called Companhia Vale do Rio Doce, Vale is a diversified multinational metals and mining company founded in 1942, and headquartered in Rio de Janeiro, Brazil. Glencore Chief Executive Officer, Gary Nagle: "Overall production was mixed period-over-period (5 commodities up and 5 down in the table below), reflecting the Ernest Henry (copper/gold) and Bolivia (zinc) portfolio disposals, and geotechnical and processing challenges at Katanga, offset by improved cobalt, nickel and ferrochrome production levels and the . Harjavalta nickel smelter in Finland (Credit: Boliden). Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. Trafigura Group sold cargoes of nickel it now believes may not have contained any of the metal to buyers including a US trade finance firm and a state-owned Jack Farchy on LinkedIn: Trafigura's Non-Existent Nickel Was Bought by a US Firm Xiang Guangda, the billionaire owner of Tsingshan Holding Group. In the meantime, the nickel market is on ice, with traders unable to exit their positions, and many billions of dollars tied up in margin calls. This suggests a possible upside of 27.1% from the stock's current price. We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. At current prices, nickel would comprise 12% of Glencore's EBITDA. The annals of commodity markets are full of tales of producers and traders, fromMetallgesellschafttoSumitomo, that blurred the lines between hedging and speculation and ended with billions of dollars in losses. For most of the past decade, they'd traded between $10,000 and $20,000. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. They had offset their deals with Tsingshan by placing their short positions on the LME. Shanghais most-traded nickel futures contract soared to CNY228,810 (USD36,235) a tonthe same day, and trading is suspended today. Glencore Nickel. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank, will take. Nickels price moved sharply higher in the week after Russias military invasion. Crucially, the decision meant traders wouldnt need to pay margin calls on the basis of the $80,000 nickel price. MINK. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. Some think this could herald the end of the exchange itself. When prices rose above $US20,000 he would consider shorting nickel, the people said, because his production costs in Indonesia were as low as $US10,000 a tonne. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. 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