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. Just after 6 a.m., the price of nickel passed $100,000 a ton. Several large brokers got margin calls of close to $US1 billion each over the course of the day. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. Live from Dubai, connecting Asian markets to the European opens. 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. Nickel prices, however, has been moving in an uptrend for a long time. 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. Worse, the chaos was spreading to other markets: Zinc prices spiked 15% in a few minutes to a record high, only to collapse again. Xiang wanted to increase Tsingshans production dramatically by producing so-called nickel matte for electric vehicle batteries. UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Today, in addition to its electronic market, its one of the last exchanges where brokers still gather in person to yell orders at one another for part of the day. Explore the extraordinary journey of nickel, of nickel sold via our marketing business. Miners, traders, and manufacturers often use the market to make short betsthat is, to make money when prices fall. spiked by as much as 250 per cent in little more than 24 hours. In this position, you will be responsible for the drafting of sales and purchase contracts and related legal documents. Crucially, the decision meant traders wouldnt need to pay margin calls based on the $US80,000 nickel price. Our fundamental responsibility is market stability, he said. 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. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. China's manufacturing activity expanded at the fastest pace in more than a decade in February. (via NewsDirect) Helix Resources Ltd (ASX:HLX) MD Mike Rosenstreich tells Proactive the company is ready to spin out its nickel and cobalt interests in the prolific Cobar Basin of NSW into a special-purpose vehicle aimed at maximising value for shareholders. Follow the topics, people and companies that matter to you. Anyone using the LME needs to understand that. Others in the market may also push up prices anticipating that short covering. Our nickel operations are in Canada, Australia, Norway, and New . Yet the day before, the market had started to unravel . The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Nickel. 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. . Tsingshan Group placed a short nickel order, and the matter of being shorted by the opponent was brushed off. Worse, the chaos was spreading to other markets: Zinc prices spiked 15 per cent in a few minutes to a record high, only to collapse again. And once again, this short squeeze racked up billions in losses for those involved. Undeterred, the Chinese tycoon has told banks he wants to maintain his position, and has asked them to keep funding him despite the losses. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. Glencore. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. The difference is that nickel is a commodity that touches the entire global economy. It also highlights the risks of an opaque market where a handful of players play outsized roles, deciding how and where purchasers like global battery makers secure raw materials. 39 000 MT. 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 . Things seemed calm at first: Prices were hovering around $50,000 a ton, and he went to bed. Everything changed when Russia invaded Ukraine on February 24. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. Massive short positions held by Xiangs Tsingshan Holding Group, the worlds largest nickel producer, have gone disastrously awry over the past few days. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . While few observers believed Xiang could reach that level of production, he was confident. The product to deliver with LME nickel contracts is cathode nickel containing at least 99.8 percent nickel, in accordancewiththeAmerican Society for Testing and Materials' specifications. Once its industrial complex reaches peak p. 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. Even at that level, clients of LME brokers had failed to pay some $US500 million of margin calls in relation to their short positions on the exchange, says a person familiar with the matter. Tsingshan accounted for about half that amount. Those past scandals forced reforms on the exchange. The price was frozen, below the record high but still at $US80,000 a tonne. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. But much of Chinas academic and business community did not believeRussia would attackits neighbor. Glencore Nickel. It was 5.42 am on March 8 in London when the nickel market broke. 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. People familiar with the discussions said the exchange would ideally prefer to wait until Xiang has reached a resolution with his banks and brokers. 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. Late Tuesday . Just after 6am, the price of nickel passed $US100,000 a tonne. Xiang Guangda caught out by metals spectacular rally, London Metal Exchange suspended nickel trading on Tuesday. Cobalt. The latest price was A$0.04 (25-minute delay). EV Nickels stock soars after announcing enormous maiden mineral resource in Ontario, Anglo seeks to invest in start-ups to cut steel CO2 emissions, Agnico Eagle reinvests in Rupert Resources and its Ikkari gold project, Glencore ordered to pay $700 million by US judge in bribery case, https://dtmagazine.com/money724-302022.php#wrap, 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. LME brokers and their clients were hit with margin call after margin call. The LME made a near-unprecedented decision. Xiang has told his banks and brokers that he still thinks the nickel price will fall andwants to keephis short position, Bloomberg reported on Thursday, citing people familiar with the matter. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. 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LMEs Chamberlain defended cancelling the trades. Nickel prices surged to an all-time high on Tuesday, up roughly 250% in just two days, and forcing the London Metal Exchange to close trading. This matters beyond the cozy world of . In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. In theory, there should be two options for this 200,000 tons of nickel short order: 1. Charged with maximising the value of Glencore's physical nickel assets across the global portfolio through supporting collaboration efforts to manage risk and improve operability and performance.
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