Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. 6 kt/a nickel in concentrate). Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. Copper. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee . Why? For a while, it wasunclear which view of the market would prevail. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. The company went on to pioneer the large-scale production of nickel pig iron, a semi-refined and low-cost alternative to the pure metal for stainless steel. 389 8 Comments. https://bbgvod-azure-us-east1-zenko.global.ssl.fastly.net/vod/vod/m/ODg0NDM2Mg/Q2xvdWRfNTgyODY2/3fb888db-fa8e-42e4-b488-726dae69584b_150.mp4, Nickel price spike purely financial but Tsingshan effect could linger, EV Nickels stock soars after announcing enormous maiden mineral resource in Ontario, Iron ore price jumps on China data, bullish steel demand outlook, Copper price rises as Chinas economy shows strong recovery, Gold price hits 1-week high on robust China economic data, Musk tamps down speculation that Tesla will mine lithium, Monumental shift in way junior mining stocks are valued is coming, Advance Lithium in joint venture talks with Mexicos national lithium company, Goldman warns carmakers against buying miners: It always end in tears. Please try again later. Xstrata Nickel Montcalm Mine 2007 - 2010 3 years. Tsingshans were even larger, numbering roughly $3 billion, according to a Bloomberg calculation based on the companys total short positionwhich, even after Xiang had closed out a portion of the bet in previous weeks, was over 150,000 tons. Tsingshan started building its short position last year in part because Xiang expected a nascent surge in nickel prices to fade, according to people familiar with the matter. But much of Chinas academic and business community did not believe Russia would attack its neighbour. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. 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. Were working to restore it. Including positions on the London Metal Exchange and bilateral bets with banks, Xiang still has short holdings in the region of 150,000 tonnes, the people said. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. Mar 16, 2022 - 8.00am. Nickel prices doubled on Tuesday and briefly rose above a record $100,000 a tonne as banks and brokers rushed to close part of a huge position amassed by Xiang Guangda, the billionaire founder of . The LME at the end of the day is a physical metal market, he says. Once its industrial complex reaches peak p. The LME halted trading of the metal yesterday and announced that it is unable to deliver on spot nickel contracts scheduled for March 9. Beijing is supportive of him, Xiang told contacts recently. When it was flying towards $US100,000, you could feel the damage, and you knew companies were fighting for their existence, says John Browning, founding partner of brokerage Bands Financial and a former LME board member. This matters beyond the cozy world of . The spike was driven in large part by a short squeeze centered on Chinese tycoon Xiang Guangda, who hadamassed a big wagerthat nickel prices would fall through his companyTsingshan Holding Group Co.On Monday, a week after trading had been suspended, Xiang wasclose to securing a loan facilityfrom JPMorgan Chase & Co. and other banks that would allow him to maintain his short position and could lead to the market reopening. It was 5.42 am on March 8 in London when the nickel market broke. Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, chief executive officer of trading houseConcord Resources Ltd.We had a frenzy based on speculation that accelerated on Monday and Tuesday. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. Market speculation has it that Tsingshan has a short position of about 200,000 tons of nickel, which it cannot deliver due to a lack of spot product after being assailed and squeezed out by US and European commodity futures giants such as Glencore, China Securities Journal reported yesterday. . Explore the latest reports and results, including financial results, production reports and our annual report. In discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. Crucially, the decision meant traders wouldnt need to pay margin calls on the basis of the $80,000 nickel price. articles a month for anyone to read, even non-subscribers! The company had plans to produce 850,000 tonnes of nickel in 2022, an increase of 40 per cent in a year, says a person briefed on them. Now, the traders watched with a mixture of horror and grim fascination as the price went skyward. gold and silver, amounted to 809 and 31 516 tons, respectively. The LME is now very likely going to die a slow, self-inflicted death through the loss of confidence in it and its products, predicted Thompson in a tweet. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. Baar, Switzerland 29 July 2022. The difference is that nickel is a commodity that touches the entire global economy. Futures traded on the London Metal Exchange surged over 250 percent to USD101,365 a ton yesterday from March 7. But much of Chinas academic and business community did not believeRussia would attackits neighbor. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its COVID-19-era low. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. As the trend towards e-mobility grows, this versatile metal is increasingly needed to produce high-performance batteries. 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. 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. In theory, there should be two options for this 200,000 tons of nickel short order: 1. Source: LME. He said UBS . In a squeeze, rising prices put traders betting on a drop in an ever-tougher financial position, forcing them or brokers and banks doing business on their behalf to buy the asset, a trade known as short covering that can drive prices even higher. A Glencore spokesman declined to comment. By now, the entire nickel industry was in crisis. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. Your password has been changed successfully. You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. Earlier this week, nickel prices in London spiked by as much as 250 per cent in little more than 24 hours. Save my name, email, and website in this browser for the next time I comment. There are also traders making plans to abandon the LME nickel contract, a move that would reduce market liquidity, making it harder for everyone from miners to car companies to manage their exposure to prices and access financing. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. 20 kt/a nickel in concentrate) and Fraser Morgan (ca. Xiang was aware of flaws in his strategy, people familiar with the matter said. Our nickel operations are in Canada, Australia, Norway, and New Caledonia. People forgot that this isnt a video game retailer; its an important physical commodity. Things seemed calm at first: Prices were hovering around $50,000 a ton, and he went to bed. Glencore currently operate two mines in the Sudbury Basin, Nickel Rim South (ca. 2W - 6W. We had a frenzy based on speculation that accelerated on Monday and Tuesday. In turn, the extraction of precious metals by the company in 2021, i.e. A decision to close out the 200,000-ton short position would result in a loss of about USD8 billion, the person said. Feb 2021 - Dec 202111 months. Neither party seems very keen on this idea, however. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. 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 . Xiang isnt just a financial trader making paper bets on price moves. A Glencore spokesman declined to comment. (Podcast). That put Tsingshans banks and brokers, which include JPMorgan Chase, BNP Paribas, and Standard Chartered, in a bind. Glencore Nickel. Xiang Guangda, the billionaire owner of Tsingshan Holding Group. Hes in the physical nickel business. Those 18 minutes will haunt me, says the executive, who wasnt authorized to speak publicly. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . When prices rose above $20,000 he would consider shorting nickel, the people said, because his production costs in Indonesia were as low as $10,000 a ton. Back Submit. Glencore Nikkelverk AS has a modern and complex processing system. The LME canceled transactions and suspended trading Tuesday after nickel's price jumped 90% to $55,000 per metric ton Monday, and then leapt again to a record high of $100,000 the next day . The production of Glencore Nikkelverk in 2019. A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after this week's unprecedented price spike, according to people . The investment is part of Ruperts non-brokered private placement for gross proceeds of about $35 million. 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