";s:4:"text";s:24152:"Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to . A year after the short squeeze that brought the LME to the brink of collapse, the nickel market remains barely functional, with trading volumes sharply lower and prices regularly experiencing wild . Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. 389 8 Comments. MINK. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. Stephen Engle reports. Glencore's disclosure follows a forecast earlier this month that there needs to be greater investment in nickel production, even though the short-term picture suggests there will be a glut of the metal. Charged with maximising the value of Glencore's physical nickel assets across the global portfolio through supporting collaboration efforts to manage risk and improve operability and performance. 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 . Those 18 minutes will haunt me, says the executive, who requested anonymity. Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. 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. Hes in the physical nickel business. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. 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. 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. 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. 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. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. Executives fromGoldman Sachs Group Inc.voiced their displeasure at the decision on a call with Chamberlain. Resetting your password will log you out of all your active Yicai Global sessions. Xiangs short position has now racked upbillions of dollars in losses. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. Learn how we produce copper and the uses it is put to. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. 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. The metal is found in all our homes as a key ingredient of stainless steel. Source: LME. The company has a diversified basket of commodities, including nickel, which is famous because of electric vehicles. 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. He was awakened by a phone call at 5:30 a.m. Our fundamental responsibility is market stability, he told Bloomberg TV. Those past scandals forced reforms on the exchange. That put Tsingshans banks and brokers, which include JPMorgan Chase, BNP Paribas, and Standard Chartered, in a bind. Their GLEN share price forecasts range from GBX 540 to GBX 740. Xiang was aware of flaws in his strategy, people familiar with the matter said. Xiang isnt just a financial trader making paper bets on price moves. Please try again later. . The LMEs special committee held another call at about 6am. China's manufacturing purchasing managers' index (PMI) climbed to 52.6 last month, the highest reading since April 2012. 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. Yet the firm's lucrative . Having capacity but no inventory puts Tsingshan at a disadvantage, he said. Worse, the chaos was spreading to other markets: Zinc prices spiked 15% in a few minutes to a record high, only to collapse again. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. 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. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. While few observers believed Xiang could reach that level of production, he was confident. Then, as now, a key factor was the intervention of the exchange. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. 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. 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. . This type is different from the mainstream ferro-nickel and nickel pig iron. Glencore has a short interest ratio ("days to cover") of 0.2, which is generally considered an acceptable ratio of short interest to trading volume. Discovery of the deposits is credited to Murray Edmund Watts in 1931 or 1932. Since 1910, nickel and other metals have been refined, produced and exported from the production plant in Kristiansand. 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. Tsingshan accounted for about half that amount. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. (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. 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. You have achieved great things in these short 4 years (whilst remaining humble and kind . 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. 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. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. (Podcast). Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. 485,996 followers. The Chinese government may also play a role. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Company says it puts it into the league of the largest undeveloped nickel deposits in the world. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. But today things have reversed, that is, Tsingshan Group has prepared 200,000 . Xiang wanted to increase Tsingshans production dramatically by producing so-callednickel mattefor electric vehicle batteries. By now, the entire nickel industry was in crisis. But its obligations dwarfed its available cash and bank credit. 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. He was awakened by a phone call at 5.30am. Iquique Chile Falconbridge . 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 . The Nikkelverk Operations. Glencore Nikkelverk is an important part of the green shift. Soaring coal and metal prices powered Swiss mining and trading firm Glencore to a net income of $5 billion in 2021, a notable recovery from its $1.9 billion loss in 2020. Those moves sent nickel to a record high of more than $100,000 a ton on Tuesday beforetrading was suspended. 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. Xiang wanted to increase Tsingshans production dramatically by producing so-called nickel matte for electric vehicle batteries. Production 2019. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. From a contractual perspective, you may be . By now, the entire nickel industry was in crisis. Nickel is a raw material that is characterized by exceptional resistance and special properties, thanks to which it has many applications. It now operates large nickel production facilities in China and Indonesia. Furious investors and traders. As at January 31, 2023 Glencore holds 72,008,404 Common Shares, representing approximately 70.8% of the issued and outstanding Common Shares. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. Others in the market may also push up prices anticipating that short covering. The LME canceled transactions and suspended trading Tuesday after nickel's price jumped 90% to $55,000 per metric ton Monday, and then leapt again to a record high of $100,000 the next day . Chinese tycoon behind nickels big short has power to fuel more drama. For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. . 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. This suggests a possible upside of 27.1% from the stock's current price. Elon Musk wanted to buy 10-20% of Glencore, but refused to. We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. People forgot that this isnt a video game retailer; its an important physical commodity.. Tsingshan is an excellent Chinese enterprise.. 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. 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 . MT. Follow the topics, people and companies that matter to you. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. Anyone using the LME needs to understand that. Senior Mine Engineer. 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. When prices rose above $20,000 he would consider shorting nickel, the people said, because his production costs in Indonesia were as low as $10,000 a ton. The giant commodity traderGlencore Plcalso had a position on the LME that would benefit from rising prices. Refused to those moves sent nickel to a record high of more expensive cobalt #. 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