Nickel prices usually move a few hundred dollars per ton in a day. Xiang Guangda, the billionaire owner of Tsingshan Holding Group. At 1am on March 8, the market opened. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its COVID-19-era low. Chinese tycoon behind nickels big short has power to fuel more drama. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. 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. 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. The LME made a near-unprecedented decision. While few observers believed Xiang could reach that level of production, he was confident. Elon Musk wanted to buy 10-20% of Glencore, but refused to. Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. Trafigura Group sold cargoes of nickel it now believes may not have contained any of the metal to buyers including a US trade finance firm and a state-owned Jack Farchy on LinkedIn: Trafigura's Non-Existent Nickel Was Bought by a US Firm It was 5.42 am on March 8 in London when the nickel market broke. 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. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to . 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. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . Canada Nickel Company Inc. $1.24. In the short term, apackage of loansfrom Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. Nickel. 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. 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. 485,996 followers. Shares in metal recycler Sims Metals hit an 11-year high of $19.55 today following a price target increase by UBS analyst Lee Power on Tuesday from $18.90 to $20.30. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. Executives fromGoldman Sachs Group Inc.voiced their displeasure at the decision on a call with Chamberlain. Most analysts sided with Xiang, at least in the medium term, believing that nickel production led by Tsingshan and its competitors in Indonesia would outpace demand. People forgot that this isnt a video game retailer; its an important physical commodity. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. 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. Our nickel operations are in Canada, Australia, Norway, and New Caledonia. 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. He was awakened by a phone call at 5:30 a.m. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. 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. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. 1. 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. The total volume mined by Glencore in 2021 fell compared to 2020, in part due to supply chain problems and the closure of some mines. MINK. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. But its obligations dwarfed its available cash and bank credit. 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. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. 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 . Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. 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. The fallout was immediate. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. When prices rose above $US20,000 he would consider shorting nickel, the people said, because his production costs in Indonesia were as low as $US10,000 a tonne. Our fundamental responsibility is market stability, he said. The dollar hit a one-week low earlier Wednesday after China's yuan gained. Anglo, which produced 59.3 million tonnes of iron ore last year, aims to halve its Scope 3 indirect emissions by 2040. 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. 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. Supervised survey and mine scheduling groups. Why bet against nickel when you have a nickel business? People forgot that this isnt a video game retailer; its an important physical commodity.. Then on March 7, nickels price began its parabolic ascent, surging from $30,000 a ton to more than $50,000. Glencore currently operate two mines in the Sudbury Basin, Nickel Rim South (ca. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. Complete Glencore PLC ADR stock information by Barron's. View real-time GLNCY stock price and news, along with industry-best analysis. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. Certain sections of this system have been patented. Xstrata Nickel Montcalm Mine 2007 - 2010 3 years. Explore the latest reports and results, including financial results, production reports and our annual report. Required fields are marked *. Yet the firm's lucrative . When Norilsk Nickel left the Western markets, Glencore became its main substitute for nonferrous metals. Xiang was aware of flaws in his strategy, people familiar with the matter said. Undeterred, the Chinese tycoon has told banks he wants tomaintain his position, and has asked them to keep funding him despite the losses. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank, will take. The company had a further 120,000 tons or more in short positions off the exchange, in bilateral deals with such banks as JPMorgan Chase & Co. and Standard Chartered Plc. 1w. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Discovery of the deposits is credited to Murray Edmund Watts in 1931 or 1932. How to Geta Free Flight to Hong Kong in 500,000 Airline Ticket Giveaway, Stocks Drop for a Second Day; Yields Stay Elevated: Markets Wrap, The SPAC Fad Is Ending in a Pile of Bankruptcies and Fire Sales, Apple Suppliers Are Racing to Exit China, AirPods Maker Says, China Warns Hedonistic Bankers to Toe the Communist Party Line. Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. The penalty is part of the $1.5 billion Glencore agreed to pay to resolve bribery and market-manipulation probes in the US, UK and Brazil. 6W - 9M. (Yicai Global) March 9 --The chairman of Tsingshan Holding Group, the worlds second-largest nickel producer, said this weeks sky-rocketing prices of the metal have not impacted the Chinese firms operations or positions in the futures market. Everything changed when Russia invaded Ukraine. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. Others took to social media. Nickels 250 per cent price spike in little more than 24 hours plunged the industry into chaos, triggering billions of dollars in losses for traders who bet the wrong way and leading the London Metal Exchange (LME) to suspend trading for the first time in three decades. Beijing is supportive of him, Xiang told contacts recently. The wild rise of nickel drew comparisons to the short squeezes in meme stocks such as GameStop that gripped retail investors for much of last year. The production of Glencore Nikkelverk in 2019. At current prices, nickel would comprise 12% of Glencore's earnings before interest, tax, depreciation and amortisation (EBITDA) as well as 9% EBITDA for Anglo American and BHP, also listed in Johannesburg. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. 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. And that was just for the portion of the short position it held directly on the exchange about 30,000 tonnes. If you don't see the email, check your junk, spam or other folders. 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. Nickel is also used in certain types of steel which lower magnetic properties. He draws a comparison with Silver Thursday, the day in 1980 when an attempt by the Hunt brothers to corner the silver market came unstuck. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. Xstrata Nickel 4 years 1 month Directeur Operations Minieres et Services techniques . Earlier this week, nickel prices in London spiked by as much as 250 per cent in little more than 24 hours. For a while, it wasunclear which view of the market would prevail. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. Coal Department. Glencore Nickel. Just after 6am, the price of nickel passed $US100,000 a tonne. 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. Anyone using the LME needs to understand that. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. Ore is processed at the Strathcona mill. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. Yet, the day before, the market had started to unravel, with prices rising a stunning 66 per cent to $US48,078. In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. Live from Dubai, connecting Asian markets to the European opens. Production 2019. By now, the entire nickel industry was in crisis. Nickel prices usually move a few hundred dollars per tonne in a day. Glencore's original trading business is still a powerhouse and is . Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. 02 March 2023. Now they had to pay big margin calls on the exchange while receiving no margin from their client. We produce some of the world's purest nickel. Glencore Nikkelverk AS has a modern and complex processing system. For a while, it was unclear which view of the market would prevail. All Rights Reserved. Including positions on the London Metal Exchange and bilateral bets with banks, Xiang still has short holdings in the region of 150,000 tons, the people said. Investors who had booked trades during the chaotic session in the early hours of Tuesday were furious. LME brokers and their clients were hit with margin call after margin call. Our fundamental responsibility is market stability, he told Bloomberg TV. Then came a geopolitical crisis that caught him unawares. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. 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. 2023 Glacier Media Group, All Rights Reserved. Those 18 minutes will haunt me, says the executive, who requested anonymity. Those moves sent nickel to a record high of more than $100,000 a ton on Tuesday beforetrading was suspended. Report summary. 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. Poseidon Nickel stock opened the day at A$0.04 after a previous close of A$0.04. He said UBS . At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. 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 . Content 10-15 %, spot, ddp China was 1,200-1,210 yuan executives fromGoldman Sachs Group Inc.voiced their at! More than half of the most versatile metals in existence has a modern and complex processing system nickel left Western! 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