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. Yet the day before, the market had started to unravel, with prices rising by astunning66% to $48,078. 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. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. A Glencore spokesman declined to comment. 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 . Several large brokers got margin calls of close to $1 billion each over the course of the day. Feb 2021 - Dec 202111 months. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. The spike was driven in large part by a short squeeze centred on Chinese tycoon Xiang Guangda, who had amassed a big wager that nickel prices would fall through his company Tsingshan Holding Group. Nickel prices doubled on Tuesday and briefly rose above a record $100,000 a tonne as banks and brokers rushed to close part of a huge position amassed by Xiang Guangda, the billionaire founder of . This type is different from the mainstream ferro-nickel and nickel pig iron. Cobalt. At 1 a.m. on Tuesday, the market opened. 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. But while the short squeeze has weighed on Tsingshan's . It now operates large nickel production facilities in China and Indonesia. 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. articles a month for anyone to read, even non-subscribers! The difference is that nickel is a commodity that touches the entire global economy. Activity . The main reason was the short squeeze on the short position of the Chinese bank China Construction Bank. Not everyone shared his pessimism about prices. Glencore Nickel. Just after 6am, the price of nickel passed $US100,000 a tonne. 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. You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. 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 . They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. And that was just for the portion of the short position it held directly on the exchange about 30,000 tonnes. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. Qingshan Holding Group,Nickel,Futures Contract, Paris Looms as Europe's Largest Financial Market, French Economy Minister Says, Alibaba, Spain's El Corte Ingles Department Store Ally on Digital Retail, China's GEM to Supply 100,000 Tons of Lithium Battery Materials to Korea's Ecopro, Toshiba Home Appliances Returns to Profit After Midea Takeover, Chairman Says, How AR is Poised to Change Business Forever. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. The metal is found in all our homes as a key ingredient of stainless steel. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. 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. Tsingshan is an excellent Chinese enterprise.. People forgot that this isnt a video game retailer; its an important physical commodity. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. The Nikkelverk Operations. Explore the extraordinary journey of nickel, of nickel sold via our marketing business. 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. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. The LME at the end of the day is a physical metal market, he says. Miners, traders, and manufacturers often use the market to make short betsthat is, to make money when prices fall. (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. Their GLEN share price forecasts range from GBX 540 to GBX 740. Supervised survey and mine scheduling groups. 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. Xiang has told his banks and brokers that he still thinks the nickel price will fall andwants to keephis short position, Bloomberg reported on Thursday, citing people familiar with the matter. Yet the day before, the market had started to unravel . Chinese tycoon behind nickels big short has power to fuel more drama. We produce other metals as a by-product of nickel production, including cobalt, copper, precious metals and platinum-group metals. The world's top five nickel-producing companies. 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. Bloomberg Daybreak Middle East. Glencore is one of the largest miners in the world that supply copper and nickel, two of my essential CCLANGs for the future of electrification. Xiang isnt just a financial trader making paper bets on price moves. 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. 21 962. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($56 billion) last year, paid its margin calls on time. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . Complete Glencore PLC ADR stock information by Barron's. View real-time GLNCY stock price and news, along with industry-best analysis. Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. The operations also include the Sudbury smelter. The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. Your password has been changed successfully. 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. He was awakened by a phone call at 5.30am. It traded briefly above $100,000 a ton early on Tuesday. Sr. Exploration Geologist CMDIC Collahuasi 2006 - 2007 1 year. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Baar, Zug, Switzerland. The LMEs special committee held another call at about 6am. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its COVID-19-era low. The Chinese government may also play a role. 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. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. Then came a geopolitical crisis that caught him unawares. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. In a squeeze, rising prices put traders betting on a drop in an ever-tougher financial position, forcing them or brokers and banks doing business on their behalf to buy the asset, a trade known as short covering that can drive prices even higher. 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. Nickel. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. . Strong passwords include numbers,letters,and special characters. For the LME, the future isunclear. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. 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. 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. They include: Koniambo is a large-scale integrated ferronickel mining and processing complex. Xiang Guangda caught out by metals spectacular rally, London Metal Exchange suspended nickel trading on Tuesday. At 8:15 a.m., the screens stopped flashing, hours before the in-person pit trading session was even set to begin. Earlier this week, nickel prices in London spiked by as much as 250 per cent in little more than 24 hours. 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. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. In theory, there should be two options for this 200,000 tons of nickel short order: 1. 115 000 MT. 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. 4 354 . Others took to social media. Investors who had booked trades during the chaotic session in the early hours of Tuesday were furious. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. 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. For most of the past decade, theyd traded between $10,000 and $20,000. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. LME chief executive Matthew Chamberlain had stayed up to watch. If you don't see the email, check your junk, spam or other folders. Undeterred, the Chinese tycoon has told banks he wants tomaintain his position, and has asked them to keep funding him despite the losses. The price move on March 8 created a systemic risk to the market, the LME said two days later. Senior Mine Engineer. Some aggrieved traders are already preparing to take legal action against the exchange. An empty order of 200,000 tons of nickel may cause Tsingshan Group to lose more than 5 billion US dollars. 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. The LME made a near-unprecedented decision. The production of Glencore Nikkelverk in 2019. I'll discuss why. Nickel Rim South Mine. While few observers believed Xiang could reach that level of production, he was confident. It decided to cancel all the trades that took place on Tuesday morning some $US3.9 billion of them. Xiangs short position has now racked up billions of dollars in losses. 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. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Those moves sent nickel to a record high of more than $100,000 a ton on Tuesday beforetrading was suspended. Xiang was aware of flaws in his strategy, people familiar with the matter said. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. 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. And once again, this short squeeze racked up billions in losses for those involved. Xiang didnt believe the rally would last. 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 . He started increasing his short position on the London Metal Exchange. 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. 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. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. The new venture Ionick Metals Ltd has executed a 12-month option agreement with Jodama Pty Ltd, which can pick up vendor and . But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. 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. Beijing is supportive of him, Xiang told contacts recently. By now, Tsingshan wasnt the only nickel company that was struggling, just the biggest. Those past scandals forced reforms on the exchange. 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. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. Processing complex with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances he believed would. Tuesday morning some $ US3.9 billion of them that touches the entire global economy watch. 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