Nickelcopper ores have been mined there since 1928. Summary. The nickel market was anything but calm. By Lucy Battersby. Xiang wanted to increase Tsingshans production dramatically by producing so-callednickel mattefor electric vehicle batteries. Iquique Chile Falconbridge . Xiangs short position has now racked upbillions of dollars in losses. 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. (Podcast). Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. Mid Term. We have interests in a range of mining assets on four continents. Certain sections of this system have been patented. Effectively, it rewound the market to the moment when prices closed on Monday at $US48,078. As the trend towards e-mobility grows, this versatile metal is increasingly needed to produce high-performance batteries. Like Comment Share. . The production of Glencore Nikkelverk in 2019. 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. Nickel makes steel corrosion-resistant and plays an essential role in our modern world. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. 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. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. 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. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. Report summary. 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. 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. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. 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. Save my name, email, and website in this browser for the next time I comment. Vale - 208,000 metric tonnes. Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. 2W - 6W. Excellent coverage of an earth-shaking event. On this day, however, metal traders were glued to a screen, watching the price action on the electronic market, which was already open to accommodate Asian trading. 21 962. 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 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. In theory, there should be two options for this 200,000 tons of nickel short order: 1. 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. Just after 6 a.m., the price of nickel passed $100,000 a ton. At 1am on March 8, the market opened. Your email address will not be published. Report this profile Report Report. The Nikkelverk Operations. . (By Jack Farchy, Alfred Cang and Mark Burton, with assistance from Sridhar Natarajan), Your email address will not be published. Supervised survey and mine scheduling groups. While few observers believed Xiang could reach that level of production, he was confident. . Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. . Its unclear whether he will get his way. Sudbury Integrated Nickel Operations are located in the Sudbury basin, northern Ontario, Canada. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. Project manager for transition of Sudbury INO from CAMP to Deswik. 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 . Find the latest Glencore plc (GLNCY) stock quote, history, news and other vital information to help you with your stock trading and investing. Our fundamental responsibility is market stability, he said. Despite the recent upheaval, his company still remains the biggest in the nickel industry. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. Just after 6am, the price of nickel passed $US100,000 a tonne. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. 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. People forgot that this isnt a video game retailer; its an important physical commodity. 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. (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. Back Submit. 92 000 MT. Not everyone shared his pessimism about prices. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. 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. In discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. . Our positions and operations dont have any problems, Xiang Guangda, who is also the Wenshou-based companys founder, told Yicai Global yesterday. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. Some think this could herald the end of the exchange itself. Mark Hansen, chief executive officer of Concord Resources, Help using this website - Accessibility statement. Live from Dubai, connecting Asian markets to the European opens. By now, Tsingshan wasnt the only nickel company that was strugglingjust the biggest. 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. The two major mining companies in Sudbury are working together to . 2023 Glacier Media Group, All Rights Reserved. Copper. 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. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. And once again, this short squeeze racked up billions in losses for those involved. Hes in the physical nickel business. Those 18 minutes will haunt me, says the executive, who wasnt authorized to speak publicly. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. (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. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. Leeuwin managing director Chris Piggott was a senior geologist at ASX-listed Bellevue when it defined its core discoveries, and was part of the team that defined the greenfields Nova-Bollinger. 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. Login. Its not just a casino.. Glencore Nickel. 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. We produce some of the world's purest nickel. 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. ICP( B2-20050348 (AVSP):2014002, By signing up, you agree to our Terms, Privacy Policy. Our analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital cost of $750 million. 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. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Even at that level, clients of LME brokers had failed to pay some $US500 million of margin calls in relation to their short positions on the exchange, says a person familiar with the matter. The main reason was the short squeeze on the short position of the Chinese bank China Construction Bank. Earlier this week, nickel prices in London spiked by as much as 250 per cent in little more than 24 hours. 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. 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 Nickel. People familiar with the discussions said the exchange would ideally prefer to wait until Xiang has reached a resolution with his banks and brokers. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trimtheir bets. 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. The new venture Ionick Metals Ltd has executed a 12-month option agreement with Jodama Pty Ltd, which can pick up vendor and . The company has assured creditor banks in China that its . LME chief executive Matthew Chamberlain had stayed up to watch. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. 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. Follow the topics, people and companies that matter to you. It traded briefly above $100,000 a ton early on Tuesday. 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. The difference is that nickel is a commodity that touches the entire global economy. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. 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. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to . 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. LMEs Chamberlain defended cancelling the trades. 39 000 MT. Xiang has told his banks and brokers that he still thinks the nickel price will fall and wants to keep his short position, Bloomberg reported on Thursday, citing people familiar with the matter. Beijing is supportive of him, Xiang told contacts recently. 6W - 9M. 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. Glencore Nikkelverk AS has a modern and complex processing system. Those moves sent nickel to a record high of more than $US100,000 ($136,000) a tonne on Tuesday before trading was suspended. Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. 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