Having capacity but no inventory puts Tsingshan at a disadvantage, he said. Provided short/mid/long/strategic schedules using Deswik. Sep 2021 - Present1 year 5 months. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. 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. 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 . On Monday, a week after trading had been suspended, Xiang was close to securing a loan facility from JPMorgan Chase and other banks that would allow him to maintain his short position and could lead to the market reopening. That put Tsingshans banks and brokers, which includeJPMorgan Chase,BNP Paribas, andStandard Chartered,in a bind. 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. LME chief executive Matthew Chamberlain had stayed up to watch. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. 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 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. Tsingshan accounted for about half that amount. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. 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. 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. 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, Chamberlain insisted on March 9 that the solvency of the LME itself was never in doubt. We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. Cash and short-term investments. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. LME brokers and their clients were hit with margin call after margin call. MMC Norilsk Nickel Recent Development 11.3 Glencore 11.3.1 Glencore Company Detail 11.3.2 Glencore Business Overview 11.3.3 Glencore Nickel Mining . Canada Nickel Company Inc. $1.24. What does Tsingshan Group's rival, Glencore, do? (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. Then came a geopolitical crisis that caught him unawares. ICP( B2-20050348 (AVSP):2014002, By signing up, you agree to our Terms, Privacy Policy. Required fields are marked *. Sr. Exploration Geologist CMDIC Collahuasi 2006 - 2007 1 year. Production 2019. 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. Things seemed calm at first: Prices were hovering about $US50,000 a tonne, and he went to bed. 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. , Mar 23, 2022. Baar, Zug, Switzerland. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. In cobalt, a Chinese state-owned firm is also quite large, but Glencore is still the largest producer of cobalt in the free world. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. Once its industrial complex reaches peak p. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. 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. 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. Vale - 208,000 metric tonnes. 92 132 MT. Copper. . One of the key Chinese players in last year's nickel short squeeze is preparing to meet London Metal Exchange Chief Executive Matthew Chamberlain in the first face-to-face encounter since the crisis that upended . 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 . Glencore Nickel. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. 1w. 21 962. 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. Mar 16, 2022 - 8.00am. While few observers believed Xiang could reach that level of production, he was confident. . The company paid at least some of its margin calls early on Monday, according to a person familiar with the matter. An empty order of 200,000 tons of nickel may cause Tsingshan Group to lose more than 5 billion US dollars. Explore the latest reports and results, including financial results, production reports and our annual report. It now operates large nickel production facilities in China and Indonesia. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . At the time of the LME's trading halt, nickel had gained more than 230% in March. 3.28% . Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. Hes in the physical nickel business. Beijing is supportive of him, Xiang told contacts recently. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. 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. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. (Podcast). Yet the firm's lucrative . Crucially, the decision meant traders wouldnt need to pay margin calls on the basis of the $80,000 nickel price. 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. 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. Company says it puts it into the league of the largest undeveloped nickel deposits in the world. Sulphuric acid. 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. Nickel. In terms of revenue, the global largest two companies occupy a share . Xiang isnt just a financial trader making paper bets on price moves. Xiangs short position has now racked upbillions of dollars in losses. (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.). Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. Xiangs short position has now racked up billions of dollars in losses. Our nickel operations are in Canada, Australia, Norway, and New . Nickel is a raw material that is characterized by exceptional resistance and special properties, thanks to which it has many applications. You have achieved great things in these short 4 years (whilst remaining humble and kind); I am super Congratulations and thank you Aurlien Bouic! 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 . 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. Xiang was aware of flaws in his strategy, people familiar with the matter said. Feb 2021 - Dec 202111 months. 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. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. For the LME, the future isunclear. 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 . Wayne has over 20 years of operational management experience of complex hydrometallurgical plants, specialising in transformation of operational and . Were sorry, this feature is currently unavailable. I see all automakers within a short time creating their own 4680 . This matters beyond the cozy world of . Your password has been changed successfully. Everything changed when Russia invaded Ukraine on February 24. The price was frozen, below the record high but still at $US80,000 a tonne. The metal is found in all our homes as a key ingredient of stainless steel. 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. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. 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. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its COVID-19-era low. . 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. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. 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. It was 5:42 a.m. on March 8 in London when the nickel market broke. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. The wild rise of nickel drew comparisons to the short squeezes in meme stocks such as GameStop Corp. that gripped retail investors for much of last year. Strong passwords include numbers,letters,and special characters. 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. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. 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. 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. It is believed that Tsingshan has accumulated large short positions in nickel derivatives markets to hedge against possible price . Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. 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