Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. Nickel prices had been rising for weeks, amid fears that supplies from Russia the largest exporter of refined nickel would be disrupted if the countryinvaded Ukraine. Nickel prices had been rising for weeks, amid fears that supplies from Russia the largest exporter of refined nickel would be disrupted if the country invaded Ukraine. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. 4 354 . 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 . Then on March 7, nickels price began its parabolic ascent, surging from $US30,000 a tonne to more than $US50,000. this week's short squeeze is nonetheless likely to push . 1. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. Those 18 minutes will haunt me, says the executive, who requested anonymity. Your password has been changed successfully. Glencore Nikkelverk AS has a modern and complex processing system. 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. 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. By Lucy Battersby. Xiang isnt just a financial trader making paper bets on price moves. Report summary. While investors who sell stocks short want the price to drop, in commodity markets many producers, traders, and users take short positions as a hedge against losses on the physical commodities they hold in inventories. 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. Xiang didnt believe the rally would last. Traders and brokers on the open outcry pit at the London Metal Exchange. 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 . Tsingshan Group is the partner of Huayou that develops the nickel project. Yet the day before, the market had started to unravel, with prices rising by astunning66% to $48,078. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. 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. 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. 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. . Xiang isnt just a financial trader making paper bets on price moves. Stephen Engle reports. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. The LME suspended nickel-market trading on Tuesday and the Shanghai Futures Exchangefollowed suita day later, after prices on Chinas top commodities bourse hit their daily upward limit. Your email address will not be published. A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after this weeks unprecedented price spike, according to people familiar with the matter. (Podcast). Xiang wanted to increase Tsingshans production dramatically by producing so-callednickel mattefor electric vehicle batteries. Those past scandals forced reforms on the exchange. Glencore Ordered to Pay $700 Million in US Over Bribery Case (Bloomberg) -- Glencore Plc was ordered by a federal judge in New York to pay $700 million as a criminal punishment for a global bribery scheme orchestrated by the Swiss-based commodities trading and mining giant.Most Read from BloombergElon Musk Regains His Spot as the World's Richest PersonHow to Get a Free Flight to Hong Kong in . Glencore-backed Leeuwin ready to set sail. Poseidon Nickel stock opened the day at A$0.04 after a previous close of A$0.04. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . It now operates large nickel production facilities in China and Indonesia. The difference is that nickel is a commodity that touches the entire global economy. The Chinese government may also play a role. Late Tuesday . Glencore Headquarters. Senior Mine Engineer. Vale - 208,000 metric tonnes. INF News.com. 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 . The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. 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. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. We produce other metals as a by-product of nickel production, including cobalt, copper, precious metals and platinum-group metals. 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. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. Baar, Zug, Switzerland. Tsingshan is in touch with relevant parties and has the support of Chinese government departments and leaders, he added. Our fundamental responsibility is market stability, he told Bloomberg TV. Wayne has over 20 years of operational management experience of complex hydrometallurgical plants, specialising in transformation of operational and . Investors who had booked trades during the chaotic session in the early hours of Tuesday were furious. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. But its obligations dwarfed its available cash and bank credit. Related Article: Nickel price spike purely financial but Tsingshan effect could linger. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. . I see all automakers within a short time creating their own 4680 . Xiang didnt believe the rally would last. Like Comment Share. The show will focus on global macro issues with a middle eastern context, provide expert analysis of major market moving stories and speak with the biggest newsmakers in the region. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Glencore is a leading producer and marketer of nickel globally and Wayne has responsibility for the operation of mines and processing facilities in Australia, New Caledonia, Canada and Norway. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. Your email address will not be published. Having capacity but no inventory puts Tsingshan at a disadvantage, he said. From a contractual perspective, you may be . (By Jack Farchy, Alfred Cang and Mark Burton, with assistance from Sridhar Natarajan), Your email address will not be published. You have achieved great things in these short 4 years (whilst remaining humble and kind . Glencore Nickel. Company says it puts it into the league of the largest undeveloped nickel deposits in the world. . Now the Chinese tycoon known as Big Shot must decide whether to unwind a wager that risks fueling more dramatic swings in one of the worlds most prized metals. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . Overseas market players have made some moves, Xiang said, driving up nickel prices in the last two days. Xiangs short position has now racked upbillions of dollars in losses. Required fields are marked *. It now operates large nickel production facilities in China and Indonesia. Its unclear whether he will get his way. Share. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. Everything changed when Russia invaded Ukraine on February 24. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. China imported 3.44 million tonnes of NPI/ferro-nickel in 2020, up by 79.89% year on year, while Indonesia's material imports came to 2.73 million tonnes in 2020, up 99.6% from a year earlier, according to China Customs data. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. The price was frozen, below the record high but still at $80,000 a ton. But its obligations dwarfed its available cash and bank credit. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. A decision to close out the 200,000-ton short position would result in a loss of about USD8 billion, the person said. Chinese tycoon behind nickels big short has power to fuel more drama. The metal is found in all our homes as a key ingredient of stainless steel. The Murrin Murrin Mine is a major nickel-cobalt mining operation being conducted in the North Eastern Goldfields, approximately 45 km east of Leonora, Western Australia.The project was initiated as a joint venture between Murrin Murrin Holdings Pty Ltd, a wholly owned subsidiary of Anaconda Nickel Limited (whose share was 60%) and Glenmurrin Pty Ltd, a wholly owned subsidiary of Glencore . For a while, it wasunclear which view of the market would prevail. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. In theory, there should be two options for this 200,000 tons of nickel short order: 1. However, Xiang believed the risks to be manageable, the people said, even as anunidentified nickel stockpilercontrolled at least half of the inventories on the exchange. The difference is that nickel is a commodity that touches the entire global economy. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. Perth, Western Australia, Australia. 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. Still, the LME has weathered numerous scandals before in its 145-year history, from a 1985 crisis in the tin market that caused many brokers to go out of business to the incident when a trader at Sumitomo hid more than $US2 billion in losses. Cliff Asness, founder ofAQR Capital Management,accused the LME, which was for more than a century owned by its members but in 2012 was sold to Hong Kong Exchanges & Clearing, of stealing money from market participants trading in good faith and giving it to Chinese nickel producers and their banks. LMEs Chamberlain defended canceling the trades. 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. Those past scandals forced reforms on the exchange. Cliff Asness, founder of AQR Capital Management, accused the LME, which was for more than a century owned by its members but in 2012 was sold to Hong Kong Exchanges & Clearing, of stealing money from market participants trading in good faith and giving it to Chinese nickel producers and their banks. Follow the topics, people and companies that matter to you. Sign up to get it every weekday morning. Miners, traders, and manufacturers often use the market to make short betsthat is, to make money when prices fall. But while the short squeeze has weighed on Tsingshan's . The dollar hit a one-week low earlier Wednesday after China's yuan gained. A Glencore spokesman declined to comment. Find the latest Glencore plc (GLNCY) stock quote, history, news and other vital information to help you with your stock trading and investing. Strong passwords include numbers,letters,and special characters. 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. Then, as now, a key factor was the intervention of the exchange. Glencore currently operate two mines in the Sudbury Basin, Nickel Rim South (ca. 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. 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. 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