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. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. Glencore is still a short opportunity but mid-2022 looks to be the end of long run commodity bear trend. The company had plans to produce 850,000 tons of nickel in 2022, an increase of 40% in a year, according to a person briefed on them. Executives at Tower Research Capital, one of Wall Streets oldest electronic market-makers, reined in its trading activity on the LME and put its membership in the exchangeunder review. 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. Short Term. Then, as now, a key factor was the intervention of the exchange. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. He was awakened by a phone call at 5.30am. We produce other metals as a by-product of nickel production, including cobalt, copper, precious metals and platinum-group metals. Hes in the physical nickel business. Beijing is supportive of him, Xiang told contacts recently. Among them were some of the biggest names on Wall Street. Save my name, email, and website in this browser for the next time I comment. Worse, the chaos was spreading to other markets: Zinc prices spiked 15% in a few minutes to a record high, only to collapse again. But its obligations dwarfed its available cash and bank credit. What does Tsingshan Group's rival, Glencore, do? 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. Copper. Nickel is mainly used in the production of stainless steel because it improves its strength and resistance to corrosion. The two major mining companies in Sudbury are working together to . He went on to pioneer new methods for producing nickel and stainless steel that upended the markets and made his Tsingshan the worlds largest producer of both. Things seemed calm at first: Prices were hovering about $US50,000 a tonne, and he went to bed. It was 5.42 am on March 8 in London when the nickel market broke. For the LME, the future isunclear. The exchange had serious concerns about the ability of market participants to meet their resulting margin calls, raising the significant risk of multiple defaults. Despite that, Chamberlaininsisted to Bloomberg TVon March 9 that the solvency of the LME itself was never in doubt. By now, the entire nickel industry was in crisis. Please try again later. Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. Those past scandals forced reforms on the exchange. From a contractual perspective, you may be . For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. Vale - 208,000 metric tonnes. The fallout was immediate. 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. 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. Baar, Switzerland 29 July 2022. Excellent coverage of an earth-shaking event. 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. Nickel is a raw material that is characterized by exceptional resistance and special properties, thanks to which it has many applications. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore. (Bloomberg) -- A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after the metal surged more than 170% in two days, according to people familiar with the matter. Everything changed when Russia invaded Ukraine. 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 . . Nickel. 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. Golf's Greatest Holes: Golfing legend Paul McGinley takes television presenter Chris Hollins on a tour of the best golf courses in Ireland and Northern Ireland. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. Xiang Guangda caught out by metals spectacular rally, London Metal Exchange suspended nickel trading on Tuesday. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. Supervised survey and mine scheduling groups. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. All Rights Reserved. By now, Tsingshan wasnt the only nickel company that was strugglingjust the biggest. By Lucy Battersby. Finance > Capital-markets. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. Everything changed when Russia invaded Ukraine on February 24. I see all automakers within a short time creating their own 4680 . 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. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. 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. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. We had a frenzy based on speculation that accelerated on Monday and Tuesday. You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. 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. Were sorry, this feature is currently unavailable. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. In theory, any price changes on the futures market should offset price changes in the value of the inventoriesas long as the traders canmeet their margin calls. For most of the past decade, theyd traded between $10,000 and $20,000. Strong passwords include numbers,letters,and special characters. He was awakened by a phone call at 5:30 a.m. Nickels price moved sharply higher in the week after Russias invasion. At 1 a.m. on Tuesday, the market opened. 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. Some aggrieved traders are already preparing to take legal action against the exchange. The company has a diversified basket of commodities, including nickel, which is famous because of electric vehicles. We produce some of the worlds purest nickel. It decided to cancel all the trades that took place on Tuesday morning$3.9 billion of them, according to a Bloomberg calculation. Its unclear whether he will get his way. For Xiangs big short position, that was painful. I'll discuss why. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Nicknamed Big Shot in Chinese commodity circles, people who know him say he has absolute confidence in his convictions and doesnt hesitate to bet big on his visions for the future. Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. Glencore Nickel. Not everyone shared his pessimism about prices. Your email address will not be published. Glencore Nikkelverk AS has a modern and complex processing system. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. Then, as now, a key factor was the intervention of the exchange. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. The difference is that nickel is a commodity that touches the entire global economy. Yet the firm's lucrative . The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its COVID-19-era low. Raglan Mine is a large nickel mining complex in the Nunavik region of northern Quebec, Canada.It is located approximately 100 kilometres (62 mi) south of Deception Bay. Those moves sent nickel to a record high of more than $100,000 a ton on Tuesday beforetrading was suspended. He started increasing his short position on the London Metal Exchange. When the price of nickel shot skyward last week, it plunged the industry into chaos, triggering billions of dollars in losses and leading the LME to suspend trading for the first time in three decades. Its also one of the most important raw materials needed in making batteries for electric vehicles. Its not just a casino.. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. Sign up to get it every weekday morning. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. 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 . 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. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. We produce some of the world's purest nickel. Several large brokers got margin calls of close to $US1 billion each over the course of the day. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. They had offset their deals with Tsingshan by placing their own short positions on the LME. 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. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. Those 18 minutes will haunt me, says the executive, who wasnt authorized to speak publicly. 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. Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. Glencore will give almost 6bn to shareholders after the mining and commodities company reported record pre-tax profits of more than 28bn in 2022 . 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. Glencore Nickel. It is owned and operated by Glencore Canada Corporation.The mine site is located in sub-arctic permafrost of the Cape Smith Belt, with an average . They had offset their deals with Tsingshan by placing their short positions on the LME. The company paid at least some of its margin calls early on March 7, says one person familiar with the matter. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. 1w. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. 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. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. People forgot that this isnt a video game retailer; its an important physical commodity.. Our nickel operations are in Canada, Australia, Norway, and New Caledonia. 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. (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. If you don't see the email, check your junk, spam or other folders. 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 . Remember, when prices move up, traders such as Xiang who have sold futures contracts face margin calls; they must put up more cash to cover potential losses. Sep 2021 - Present1 year 5 months. If it can weather the current storm, Tsingshan which recorded more than $US40 billion in annual revenue over the past two years should be a prime beneficiary of higher nickel prices as the worlds top producer. 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. The world's top five nickel-producing companies. Baar, Zug, Switzerland. The LME at the end of the day is a physical metal market, he says. 02 March 2023. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. It was 5.42 am on March 8 in London when the nickel market broke. . Wayne has over 20 years of operational management experience of complex hydrometallurgical plants, specialising in transformation of operational and . At 8:15 a.m., the screens stopped flashing, hours before the in-person pit trading session was even set to begin. INF News.com. The price move on March 8 created a systemic risk to the market, the LME said two days later. Investors who had booked trades during the chaotic session in the early hours of Tuesday were furious. Not everyone shared his pessimism about prices. It marked the first major market failure sinceRussias invasion of Ukrainejolted global markets, showing how the removal of one of the worlds largest exporters of resources from the financial system in the space of weeks is having ripple effects across the world. But Xiang must now decide what to do with those positions, which give him outsize influence on the price of a metal used in everything from electric-vehicle batteries to stainless-steel kitchen appliances. Their GLEN share price forecasts range from GBX 540 to GBX 740. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trimtheir bets. . Nickel Rim South Mine. 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