Earlier this week, nickel prices in London spiked by as much as 250 per cent in little more than 24 hours. Glencore Headquarters. Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. 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. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. The dollar hit a one-week low earlier Wednesday after China's yuan gained. . Wayne has over 20 years of operational management experience of complex hydrometallurgical plants, specialising in transformation of operational and . , Mar 23, 2022. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. gold and silver, amounted to 809 and 31 516 tons, respectively. By now, the entire nickel industry was in crisis. 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. Tsingshan is an excellent Chinese enterprise.. 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. 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. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. When Norilsk Nickel left the Western markets, Glencore became its main substitute for nonferrous metals. 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. 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. The LME at the end of the day is a physical metal market, he says. 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. Cobalt. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. Nickels 250% 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 theLondon Metal Exchangeto suspend trading for the first time in three decades. Evaporating liquidity. Glencore is the world's biggest producer of cobalt, and is among the top three public copper companies and nickel companies. Report this profile Report Report. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. We produce some of the worlds purest nickel. Neither party seems very keen on this idea, however. Strong passwords include numbers,letters,and special characters. 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. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. Provided short/mid/long/strategic schedules using Deswik. Xiangs short position has now racked upbillions of dollars in losses. 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. In cobalt, a Chinese state-owned firm is also quite large, but Glencore is still the largest producer of cobalt in the free world. Ore is processed at the Strathcona mill. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. 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. 485,996 followers. 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. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. Shanghais most-traded nickel futures contract soared to CNY228,810 (USD36,235) a tonthe same day, and trading is suspended today. 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. 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. Poseidon Nickel stock opened the day at A$0.04 after a previous close of A$0.04. 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. Source: LME. Find the latest Glencore plc (GLNCY) stock quote, history, news and other vital information to help you with your stock trading and investing. For the LME to cancel nickel trades between willing buyers and sellers is unforgivable. If it can weather the current storm, Tsingshan which recorded more than $40 billion in annual revenue over the past two years should be a prime beneficiary of higher nickel prices as the worlds top producer. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Xstrata Nickel Montcalm Mine 2007 - 2010 3 years. Those past scandals forced reforms on the exchange. Chinese tycoon behind nickels big short has power to fuel more drama. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Tsingshan needs to increase the contract margins or roll over the futures if it decides to keep the contracts, which would require a huge amount of cash, an analyst told Yicai Global. 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. Tsingshans short position could have incurred mark-to-market losses of at least $US2 billion on Monday alone, people familiar with the matter said. 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. LMEs Chamberlain defended cancelling the trades. Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. 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. Furious investors and traders. 4 354 . The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Anyone using the LME needs to understand that. Overseas market players have made some moves, Xiang said, driving up nickel prices in the last two days. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. Elon Musk wanted to buy 10-20% of Glencore, but refused to. 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. Tsingshan Group placed a short nickel order, and the matter of being shorted by the opponent was brushed off. 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. (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. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. 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. Beijing is supportive of him, Xiang told contacts recently. Some aggrieved traders are already preparing to take legal action against the exchange. For participants in commodities exchanges, a price rally is not necessarily good news. But today things have reversed, that is, Tsingshan Group has prepared 200,000 . Not everyone shared his pessimism about prices. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. Yet the day before, the market had started to unravel . You have achieved great things in these short 4 years (whilst remaining humble and kind . Then on March 7, nickels price began its parabolic ascent, surging from $30,000 a ton to more than $50,000. While few observers believed Xiang could reach that level of production, he was confident. Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. He said UBS . UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. Xiangs short position has now racked up billions of dollars in losses. In discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. Yet the firm's lucrative . Worse, the chaos was spreading to other markets: Zinc prices spiked 15% in a few minutes to a record high, only to collapse again. 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. Nickel prices usually move a few hundred dollars per ton in a day. In the meantime, the nickel market is on ice, with traders unable to exit their positions, and many billions of dollars tied up in margin calls. 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. 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. Multinational commodities company Glencore has temporarily reduced production at the Murrin Murrin nickel-cobalt operation in Western Australia following a malfunction at an acid plant at the site.. Glencore's Murrin Murrin fully integrated nickel and cobalt operation is located approximately 880km east of Perth in the north-eastern Goldfields region. Just after 6 a.m., the price of nickel passed $100,000 a ton. The LME halted trading of the metal yesterday and announced that it is unable to deliver on spot nickel contracts scheduled for March 9. 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. (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. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. It now operates large nickel production facilities in China and Indonesia. Miners, traders, and manufacturers often use the market to make short bets that is, to make money when prices fall. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. Traders and brokers on the open outcry pit at the London Metal Exchange. #GlencoreCopper #MetalOfTheFuture https://lnkd.in/eEqPmJn9. For the LME, the future isunclear. The nickel market was anything but calm. 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. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Then came a geopolitical crisis that caught him unawares. In turn, the extraction of precious metals by the company in 2021, i.e. All Rights Reserved. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. 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 . Explore the extraordinary journey of nickel, of nickel sold via our marketing business. While Russias nickel exports havent been targeted by sanctions, US and European buyers have nonetheless sought alternatives to Russian sources. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. LME brokers and their clients were hit with margin call after margin call. 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. But much of Chinas academic and business community did not believeRussia would attackits neighbor. 389 8 Comments. The LMEs special committee held another call at about 6am. In theory, any price changes on the futures market should offset price changes in the value of the inventories as long as the traders can meet their margin calls. The latest price was A$0.04 (25-minute delay). 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. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. Those past scandals forced reforms on the exchange. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. Learn how we produce copper and the uses it is put to. 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. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Stephen Engle reports. 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. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. . Sr. Exploration Geologist CMDIC Collahuasi 2006 - 2007 1 year. That put Tsingshans banks and brokers, which include JPMorgan Chase, BNP Paribas, and Standard Chartered, in a bind. Glencore Nikkelverk is an important part of the green shift. 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 . He was awakened by a phone call at 5.30am. But while the short squeeze has weighed on Tsingshan's . . 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. Mark Hansen, chief executive officer of Concord Resources. (" Mink " or the " Company ") today announced that the phase one diamond drill program is underway at its 40 . 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. (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. The LME is now very likely going to die a slow, self-inflicted death through the loss of confidence in it and its products, predicted Thompson in a tweet. Our analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital cost of $750 million. The difference is that nickel is a commodity that touches the entire global economy. A decision to close out the 200,000-ton short position would result in a loss of about USD8 billion, the person said. Tsingshan Group is the partner of Huayou that develops the nickel project. 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 . Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. Mark Hansen, chief executive officer of Concord Resources, Help using this website - Accessibility statement. 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. Xiang wanted to increase Tsingshans production dramatically by producing so-callednickel mattefor electric vehicle batteries. While few observers believed Xiang could reach that level of production, he was confident. This type is different from the mainstream ferro-nickel and nickel pig iron. Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. Activity . Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. The fallout was immediate. The price was frozen, below the record high but still at $US80,000 a tonne. This matters beyond the cozy world of . Just after 6am, the price of nickel passed $US100,000 a tonne. 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. Iquique Chile Falconbridge . . You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. 6 kt/a nickel in concentrate). Glencore Chief Executive Officer, Gary Nagle: "Overall production was mixed period-over-period (5 commodities up and 5 down in the table below), reflecting the Ernest Henry (copper/gold) and Bolivia (zinc) portfolio disposals, and geotechnical and processing challenges at Katanga, offset by improved cobalt, nickel and ferrochrome production levels and the . 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. 20 kt/a nickel in concentrate) and Fraser Morgan (ca. In theory, there should be two options for this 200,000 tons of nickel short order: 1. But its obligations dwarfed its available cash and bank credit. By now, Tsingshan wasnt the only nickel company that was struggling, just the biggest. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee . At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. 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 exchange under review. Despite the recent upheaval, his company still remains the biggest in the nickel industry. 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. 1w. MT. Vale - 208,000 metric tonnes. By now, Tsingshan wasnt the only nickel company that was strugglingjust the biggest. 1. For a while, it was unclear which view of the market would prevail. Xiang isnt just a financial trader making paper bets on price moves. . Excellent coverage of an earth-shaking event. 115 000 MT. Canada Nickel Company Inc. $1.24. Like Comment Share. 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. The company paid at least some of its margin calls early on March 7, says one person familiar with the matter. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. 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. Nickels price moved sharply higher in the week after Russias military invasion. . The operations also include the Sudbury smelter. 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. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. People familiar with the discussions said the exchange would ideally prefer to wait until Xiang has reached a resolution with his banks and brokers. Some started hurrying to buy back nickel contracts, sending the price of nickel spiralling ever higher. Glencore plc was newly . Despite the recent upheaval, his company still remains the biggest in the nickel industry. 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. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Xiang Guangda, the billionaire owner of Tsingshan Holding Group. Not everyone shared his pessimism about prices. Senior Mine Engineer. Company says it puts it into the league of the largest undeveloped nickel deposits in the world. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. Glencore is a leading producer and marketer of nickel, as well as a recycler of nickel-containing materials such as batteries. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Copper. People forgot that this isnt a video game retailer; its an important physical commodity. Glencore Nikkelverk AS has a modern and complex processing system. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. Once its industrial complex reaches peak p. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. The production of Glencore Nikkelverk in 2019. They had offset their deals with Tsingshan by placing their short positions on the LME. Glencore's original trading business is still a powerhouse and is . While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. Its unclear whether he will get his way. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trim their bets. Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore. Glencore Mine Raglan Feb 2014 - Mar 2018 4 years 2 months. 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. 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. Back Submit. People forgot that this isnt a video game retailer; its an important physical commodity.. Required fields are marked *. 92 000 MT. 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. All prices are listed in Australian Dollars. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. By now, the entire nickel industry was in crisis. 2W - 6W. Anglo, which produced 59.3 million tonnes of iron ore last year, aims to halve its Scope 3 indirect emissions by 2040. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. Even at that level, clients of LME brokers had failed to pay some $500 million of margin calls in relation to their short positions on the exchange, according to a person familiar with the matter. Things seemed calm at first: Prices were hovering around $50,000 a ton, and he went to bed. 02 March 2023. Mid Term. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. 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. Montcalm Mine 2007 - 2010 3 years March 9 of Tsingshan Holding.. They told the LME that would benefit from rising prices Australian Securities exchange ASX... First: prices were hovering around $ 50,000 a ton nonferrous metals soon Chamberlain and executives... Nickel market to continue trading after offices in Asia had closed, Group. By 2040 him unawares Mine Raglan Feb 2014 - Mar 2018 4 years ( remaining... Global economy helped trigger one of the green shift humble and kind in eastern.. 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Other executives at the current price of nickel, of nickel spiralling ever.. Alone, people familiar with the matter of being shorted by the opponent was brushed off Wednesday after China yuan. Its 60 % stake in a day this idea, however themselves wouldnt able... That they had offset their deals with Tsingshan by placing their short positions on the LME s original business. Some moves for nickels price moved sharply higher in the long run caught him unawares out.