Nickel rocketed to a record high above $US100,000 a tonne on Tuesday, driven in part by Tsingshan and its brokers activity, before trading was suspended. The current events are unprecedented, LME said in a notice. The price spike left Tsingshan exposed to $8 billion USD of trading losses whilst struggling to meet their margin calls. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Then on March 7, nickel's price began its parabolic. Xiang Guangda has been in discussions with banks led by JPMorgan Chase & Co. about a loan facility to backstop his short position, which has roiled the nickel market after he struggled to pay massive margin calls to banks and brokers last week. Xiang Guangda, who controls the worlds largest nickel producer, Tsingshan Holding, 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. For a while, it wasunclear which view of the market would prevail. It did not provide any other details, such as how long the standstill period would last. Its unclear whether he will get his way. One of Tsingshans brokers, CCBI Global Markets, also failed to pay hundreds of millions of dollars in margin calls on its nickel positions on March 7. At $2,250 a tonne, the capital required on 300,000 tonnes of nickel would be $675 million, according to Reuters calculations. ), by sales channel (Direct Channel, Distribution Channel), by player (Shandong Xinhai Technology, Tsingshan Holding Group, Eramet, Linyi Yichen Alloy, Jiangsu Delong Nickel Industry . A week earlier, nickel was trading around $25,000 and the price of the metal has more than quadrupled in a matter of days. 3.1 What is the margin call to Tsingshan? The London Metal Exchange initially announced rule changes late Monday in respond to a daily spike of as much of 90% (Reuters) Nickel, used in stainless steel and electric-vehicle batteries . 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. President Tayyip Erdogan indicated on Wednesday that elections will be held on May 14, sticking to his previous plan for the vote with a date just over three months after a devastating earthquake killed more than 45,000 people in Turkey. UNFORGIVEABLE,tweetedMark Thompson, a former trader at Trafigura and Apollo. Yet the day before, the market had started to unravel, with prices rising by astunning66 per cent to US$48,078. According to reports, Tsingshan Group plans to produce 850,000 tons of nickel in 2022, an increase of 40% compared with the production of nearly 600,000 tons in 2021. Contact us | Reuters could not determine how large Tsingshan's short position currently is after it cut its exposure. It also doesn't create waste and may help fight the climate crisis. 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. Creditors and banks who acted for Tsingshan were demanding margin settlements and the closing of all positions. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. The new historic high is nearly twice the previous record of $51,600 in 2007. The LME did not put it into default, instead giving it more time to pay. Tsingshan's difficulties in paying its margin calls, and the company's ongoing bailout negotiations, have put its banks and brokers in a bind, as they have had to make hefty margin calls of their own at the LME to cover their short positions on the exchange. On March 8,2022 price of Nickel went suddenly up $100 per kilogram . And never trade money that you cannot afford to lose. Given our role in supervising the LME, we have been, and will continue to be, taking a very close interest in how it is managing and responding to the issues, the FCA confirmed in late March. Short-covering trades made last week by the Chinese billionaire contributed to a swift, huge surge. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Others took to social media. And once again, this short squeeze racked up billions in losses for those involved. Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. The Companys registered office is at Bahamas Financial Centre, 3rd Floor, Shirley and Charlotte Street, P.O. NIC's operations and cash flow remained stable in 2022 despite Tsingshan's significant loss on its nickel short position in March 2022. Now they had to pay big margin calls on the exchange while receiving no margin from their client. The majority of retail investor accounts lose money when trading CFDs. Tsingshan, who pioneered the Rotary Kiln Electric Furnace (RKEF) process to produce low-cost nickel pig iron (NPI), is now the dominant player in the Indonesian NPI industry and a global leader in NPI processing technology, including having implemented the Argon Oxygen Decarburisation process which incorporates the direct hot charging of NPI into the stainless steel production process for a . The difference between trading assets and CFDs. Advertise | Careers | Editorial Guidelines | For Xiangs big short position, that was painful. Chinese nickel giant Tsingshan's hedge backfired Commodities companies of course generally benefit from higher prices for their products. 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. The Chinese nickel tycoon whose big short position caused chaos reached a deal with his banks to avoid further margin calls, marking a key step toward restoring stability to the market after an unprecedented squeeze. The broker was able to settle the margin calls on Tuesday after several clients, including Tsingshan, got loans to cover their positions, one of the people said. Tsingshan thus desperately scrambled to buy nickel to cover its short position, which only added further upward pressure on prices. We expect the EBITDA margin to be around . Tsingshan has been struggling to pay margin calls to its brokers, according to people familiar with the situation. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. Prices of oil, gas, wheat and a range of metals, including aluminium and palladium, have soared since the invasion, ramping up costs for companies and consumers and threatening the nascent recovery from the coronavirus pandemic. Given that JPMorgan was reported as the biggest trading counterparty against which Tsingshans nickel trades were made, the US bank led the subsequent agreement to arrange a rescue credit facility, secured from various lenders, including China Construction Bank (CCB), to help the Chinese nickel giant address its immediate liquidity squeeze. Your decision to trade should depend on your attitude to risk, expertise in the market, the spread of your portfolio and how comfortable you feel about losing money. The XM Research Desk, manned by market expert professionals, provides live daily updates on all the major events of the global markets in the form of market reviews, forex news, technical analysis, investment topics, daily outlook and daily vidoes. For non-personal use or to order multiple copies, please contact He started increasing his short position on the London Metal Exchange. Three-month nickel on the LME more than doubled to over $100,000 a ton yesterday before the LME stepped in to halt trading of the metal. The LME nickel short squeeze was created by Chinese stainless-steel producer Tsingshan as it built up massive short positions for the metal, and its margin calls spike in-line with the surge in nickel prices in March. Help using this website - Accessibility statement. Bloomberg: Balance of Power focuses on the politics and policies being shaped by the agenda of President Biden's administration. Then on March 7, nickels price began its parabolic ascent, surging from US$30,000 a ton to more than US$50,000. The giant commodity trader Glencore Plc also had a position on the LME that would benefit from rising prices. In response to the crisis, the LME suspended nickel trading on 8 March and cancelled all trades executed on or after 00:00 UK time on 8 March 2022 in the inter-office market and on LMEselect (LME online trading platform) until further notice.. Tsingshan's 2022 nickel equivalent output is estimated at 850,000 tonnes. All quotes delayed a minimum of 15 minutes. He draws a comparison with Silver Thursday, the day in 1980 when an attempt bythe Hunt brothersto corner the silver market came unstuck. Prices doubled to a record above $100,000 per tonne in a matter of hours on Tuesday, prompting the London Metal Exchange (LME) to halt trading. That put Tsingshans banks and brokers, which include JPMorgan Chase, BNP Paribas, and Standard Chartered,in a bind. Nickel prices trading on the London Metal Exchange (LME) has fallen significantly over the past few months as restrictions cooled the turbulent market, pulling the metal down from its record high of above $100,000 a tonne on 8 March. It should be mentioned that nickel had already rallied to $25,000 in January before easing off by the end of the month. Trimegah menilai bisa. read more. Not everyone shared his pessimism about prices. A Glencore spokesman declined to comment. If you are considering investing or trading nickel, its important to do your own research. Bloomberg News' Joe Deaux reports. But now, serious questions are being raised over the LMEs lack of foresight in not anticipating this incident, especially given the sheer size of Tsingshans short position, which it began to compile last year. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. "In the course of the standstill period, Tsingshan and the consortium banks will progress discussions in relation to a standby secured liquidity facility," the company said. Even at that level, clients of LME brokers had failed to pay some US$500 million of margin calls in relation to their short positions on the exchange, according to a person familiar with the matter. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. 2023 Capital Com Online Investments Ltd. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. The frenzied move the largest-ever on the LME came as investors and industrial users who had sold the metal scrambled to buy the contracts back after prices initially rallied on concerns . Last week by the agenda of President Biden 's administration Paribas, industry! 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