Many producers, traders, and users of nickel with short positions on the LME were facing margin calls many times larger than they were prepared for. Xiang was aware of flaws in his strategy, people familiar with the matter said. #GlencoreCopper #MetalOfTheFuture https://lnkd.in/eEqPmJn9. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Si estn subiendo los predios de los metales y dedcuieto nuevas forulasparavas frmulas paraformar y tranformar los metales megustaria encontrar una empresa ,organizacin,para si le interereza ase un tratado denegosiar un trato demostraciones y prbarles yensearleslo que estudie transformaciones aliaciones dijitales y la fabricacionde. The spike was driven in large part by a short squeeze centred on Chinese tycoon Xiang Guangda, who had amassed a big wager that nickel prices would fall through his company Tsingshan Holding Group. Still, the LME has weathered numerousscandalsbefore in its 145-year history, from a 1985crisis in the tin marketthat caused many brokers to go out of business to the incident when a trader at Sumitomo hid more than $2 billion in losses. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. 4 354 . Its not just a casino. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. Login. Hes in the physical nickel business. Short Term. Now they had to pay big margin calls on the exchange while receiving no margin from their client. By now, Tsingshan wasnt the only nickel company that was struggling, just the biggest. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trimtheir bets. 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. It can produce 1.8 million tons of nickel alloy and its mine in Indonesia has an annual capacity of over 3.5 million tons. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. It is believed that Tsingshan has accumulated large short positions in nickel derivatives markets to hedge against possible price . 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. Overseas market players have made some moves, Xiang said, driving up nickel prices in the last two days. LME chief executive Matthew Chamberlain had stayed up to watch. For participants in commodities exchanges, a price rally is not necessarily good news. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. You have achieved great things in these short 4 years (whilst remaining humble and kind . As at January 31, 2023 Glencore holds 72,008,404 Common Shares, representing approximately 70.8% of the issued and outstanding Common Shares. Beijing is supportive of him, Xiang told contacts recently. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. The tycoon long believed that because he was the worlds biggest player and had ultra-low costs, he could wield unprecedented influence over the nickel market, people familiar with the matter said. For participants in commodities exchanges, a price rally is not necessarily good news. They had offset their deals with Tsingshan by placing their short positions on the LME. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. Mark Hansen, chief executive officer of Concord Resources, Help using this website - Accessibility statement. Xiang Guangda -- who controls the worlds largest nickel producer, Tsingshan Holding Group Co., and is known as Big Shot in Chinese commodity circles -- has closed out part of his companys short position and is considering whether to exit the wager altogether, the people said. The LME suspended nickel-market trading on Tuesday and the Shanghai Futures Exchange followed suit a day later, after prices on Chinas top commodities bourse hit their daily upward limit. For the LME to cancel nickel trades between willing buyers and sellers is unforgivable. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to . 3.28% . In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. 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. But the effects of the short squeeze are likely to be felt in other ways. For Xiangs big short position, that was painful. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. Report this profile Report Report. . Baar, Zug, Switzerland. We had a frenzy based on speculation that accelerated on Monday and Tuesday. Learn how we produce copper and the uses it is put to. MT. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. Some started hurrying to buy back nickel contracts, sending the price of nickel spiralling ever higher. But much of Chinas academic and business community did not believeRussia would attackits neighbor. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. Shanghais most-traded nickel futures contract soared to CNY228,810 (USD36,235) a tonthe same day, and trading is suspended today. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. Glencore Headquarters. Were sorry, this feature is currently unavailable. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. 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. Explore the latest reports and results, including financial results, production reports and our annual report. 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. Share. Born in 1958, Xiang founded his business more than 30 years ago as a workshop making frames for car doors and windows in Wenzhou, eastern China. At current prices, nickel would comprise 12% of Glencore's EBITDA. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. Not everyone shared his pessimism about prices. Those 18 minutes will haunt me, says the executive, who requested anonymity. Nickel prices, however, has been moving in an uptrend for a long time. Those moves sent nickel to a record high of more than $100,000 a ton on Tuesday beforetrading was suspended. The metal is found in all our homes as a key ingredient of stainless steel. Leeuwin managing director Chris Piggott was a senior geologist at ASX-listed Bellevue when it defined its core discoveries, and was part of the team that defined the greenfields Nova-Bollinger. Anyone using the LME needs to understand that. 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. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. He was awakened by a phone call at 5:30 a.m. 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. 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 . 92 000 MT. Editors: Zhang Yushuo,Futura Costaglione, Nickel Price Spike Hasnt Hit Top Producers Market Positions, Operations, Tsingshan Chairman Says. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. 2017 - 2018 Yicai Global, Yicai Media Group. 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. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. Executives fromGoldman Sachs Group Inc.voiced their displeasure at the decision on a call with Chamberlain. But while the short squeeze has weighed on Tsingshan's . Furious investors and traders. Everything changed when Russia invaded Ukraine. Harjavalta nickel smelter in Finland (Credit: Boliden). Sign up to get it every weekday morning. Sep 2021 - Present1 year 5 months. The paper loss stood at $8 billion on Monday, before violent moves in nickel prices led the London Metal Exchange to suspend trading in the metal on Tuesday, one of the people said. Tsingshan accounted for about half that amount. Now they recognised that they had to suspend trading. Coal Department. Xiang didnt believe the rally would last. By Lucy Battersby. When it was flying towards $100,000, you could feel the damage, and you knew companies were fighting for their existence, says John Browning, founding partner of brokerageBands Financial Ltd.and a former LME board member. Glencore has a short interest ratio ("days to cover") of 0.2, which is generally considered an acceptable ratio of short interest to trading volume. 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. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. Tsingshan mostlymakesstainless steelthat isused inthepetroleum, chemicals, auto,and other fields. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Project manager for transition of Sudbury INO from CAMP to Deswik. The price was frozen, below the record high but still at $80,000 a ton. 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. Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. 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. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. Still, contracts on the LME are backed by physical metal in a network of warehouses around the world, providing a direct link with the real-world metals industry. INF News.com. Late Tuesday . Now they had to pay big margin calls on the exchange while receiving no margin from their client. Finance > Capital-markets. 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 . Ore is processed at the Strathcona mill. The price move on March 8 created a systemic risk to the market, the LME said two days later. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. That put Tsingshans banks and brokers, which includeJPMorgan Chase,BNP Paribas, andStandard Chartered,in a bind. 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. 2W - 6W. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. Born in 1958, Xiang founded his business more than 30 years ago as a workshop making frames for car doors and windows in Wenzhou, eastern China. 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 . I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. Sulphuric acid. At 8:15 a.m., the screens stopped flashing, hours before the in-person pit trading session was even set to begin. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. In August 2021, Glencore increased its medium-term emission reduction target to a 50% reduction by 2035 on 2019 levels and introduced a new short-term target of a 15% reduction by 2026 on 2019 levels. Its unclear whether he will get his way. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. 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. Nickel. The LMEs history dates back to the early 19th century, when metal traders drew a circle in the sawdust on the floor of the Jerusalem Coffee House in the City of London. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Glencore-backed Leeuwin ready to set sail. The LMEs history dates back to the early 19th century, when metal traders drew a circle in the sawdust on the floor of the Jerusalem Coffee House in the City of London. Were working to restore it. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. One resolution to the situation may be for Glencore and Xiang to strike a deal to use Glencores long positions to cancel out some of Xiangs short. (This account of events in the nickel market is based on dozens of interviews with people involved, many of whom requested anonymity because the matters are private.). Xiang has told his banks and brokers that he still thinks the nickel price will fall and wants to keep his short position, Bloomberg reported on Thursday, citing people familiar with the matter. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. People forgot that this isnt a video game retailer; its an important physical commodity. And when those wagers move violently in the opposite direction, they can be hit with huge margin calls, or requests to put down more cash to back their trades. For a while, it wasunclear which view of the market would prevail. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. And once again, this short squeeze racked up billions in losses for those involved. 6W - 9M. Then on March 7, nickels price began its parabolic ascent, surging from $30,000 a ton to more than $50,000. Xiang himself had little interest in international news, the people said, and the growing speculation over a possible war was hard to track in China. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Company says it puts it into the league of the largest undeveloped nickel deposits in the world. 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