You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. What does Tsingshan Group's rival, Glencore, do? 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. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Trafigura Group sold cargoes of nickel it now believes may not have contained any of the metal to buyers including a US trade finance firm and a state-owned Jack Farchy on LinkedIn: Trafigura's Non-Existent Nickel Was Bought by a US Firm Harjavalta nickel smelter in Finland (Credit: Boliden). Glencore is a leading producer and marketer of nickel, as well as a recycler of nickel-containing materials such as batteries. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. . Perth, Western Australia, Australia. Executives fromGoldman Sachs Group Inc.voiced their displeasure at the decision on a call with Chamberlain. Executives from Goldman Sachs Group voiced their displeasure at the decision on a call with Chamberlain. 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. Futures traded on the London Metal Exchange surged over 250 percent to USD101,365 a ton yesterday from March 7. I see all automakers within a short time creating their own 4680 . 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. Finance > Capital-markets. In August 2021, Glencore increased its medium-term emission reduction target to a 50% reduction by 2035 on 2019 levels and introduced a new short-term target of a 15% reduction by 2026 on 2019 levels. Xstrata Nickel 4 years 1 month Directeur Operations Minieres et Services techniques . Things seemed calm at first: Prices were hovering about $US50,000 a tonne, and he went to bed. Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. It decided to cancel all the trades that took place on Tuesday morning some $US3.9 billion of them. Now the Chinese tycoon known as Big Shot must decide whether to unwind a wager that risks fueling more dramatic swings in one of the worlds most prized metals. Sign up to get it every weekday morning. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . Company says it puts it into the league of the largest undeveloped nickel deposits in the world. 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. Required fields are marked *. And once again, this short squeeze racked up billions in losses for those involved. We have interests in a range of mining assets on four continents. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. , Mar 23, 2022. Once its industrial complex reaches peak p. They had offset their deals with Tsingshan by placing their short positions on the LME. Tsingshan accounted for about half that amount. Cobalt. People forgot that this isnt a video game retailer; its an important physical commodity.. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank, will take. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. Your email address will not be published. Nickels price moved sharply higher in the week after Russias invasion. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Resetting your password will log you out of all your active Yicai Global sessions. Tsingshan started building its short position last year in part because Xiang expected a nascent surge in nickel prices to fade, according to people familiar with the matter. Now they had to pay big margin calls on the exchange while receiving no margin from their client. Glencore-backed Leeuwin ready to set sail. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. 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 obligations dwarfed its available cash and bank credit. Then, as now, a key factor was the intervention of the exchange. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. Those moves sent nickel to a record high of more than $US100,000 ($136,000) a tonne on Tuesday before trading was suspended. Poseidon Nickel stock opened the day at A$0.04 after a previous close of A$0.04. The company paid at least some of its margin calls early on Monday, according to a person familiar with the matter. Elon Musk wanted to buy 10-20% of Glencore, but refused to. Long Term . They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. Investors who had booked trades during the chaotic session in the early hours of Tuesday were furious. Its unclear whether he will get his way. Provided short/mid/long/strategic schedules using Deswik. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. Remember, when prices move up, traders like Xiang who have sold futures contracts face margin calls; they must put up more cash to cover potential losses. People forgot that this isnt a video game retailer; its an important physical commodity.. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. 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. 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. ESC Mali school of busness. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. Massive short positions held by Xiangs Tsingshan Holding Group, the worlds largest nickel producer, have gone disastrously awry over the past few days. Related Article: Nickel price spike purely financial but Tsingshan effect could linger. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. From a contractual perspective, you may be . Were working to restore it. It also highlights the risks of an opaque market where a handful of players play outsized roles, deciding how and where purchasers like global battery makers secure raw materials. Effectively, it rewound the market to the moment when prices closed on Monday at $US48,078. 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. Undeterred, the Chinese tycoon has told banks he wants to maintain his position, and has asked them to keep funding him despite the losses. The metal is found in all our homes as a key ingredient of stainless steel. 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 . Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. Just after 6 a.m., the price of nickel passed $100,000 a ton. 2023 Glacier Media Group, All Rights Reserved. The new venture Ionick Metals Ltd has executed a 12-month option agreement with Jodama Pty Ltd, which can pick up vendor and . While few observers believed Xiang could reach that level of production, he was confident. 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. Golf's Greatest Holes: Golfing legend Paul McGinley takes television presenter Chris Hollins on a tour of the best golf courses in Ireland and Northern Ireland. 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. In turn, the extraction of precious metals by the company in 2021, i.e. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. 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. Copper. 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. Xiang was aware of flaws in his strategy, people familiar with the matter said. Project manager for transition of Sudbury INO from CAMP to Deswik. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. Others took to social media. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. The annals of commodity markets are full of tales of producers and traders, from Metallgesellschaft to Sumitomo, that blurred the lines between hedging and speculation and ended with billions of dollars in losses. 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 . Nickel is also used in certain types of steel which lower magnetic properties. Sulphuric acid. For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. Feb 2021 - Dec 202111 months. 20 kt/a nickel in concentrate) and Fraser Morgan (ca. Tsingshan Group is the partner of Huayou that develops the nickel project. Glencore Headquarters. The world's top five nickel-producing companies. Supervised survey and mine scheduling groups. 92 000 MT. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. (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. Report summary. 5 000 MT. 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. this week's short squeeze is nonetheless likely to push . For the LME to cancel nickel trades between willing buyers and sellers is unforgivable. . Inability to deliver the products was a big problem for Tsingshan, the analyst added, noting that the company has nickel iron, stainless steel, and nickel matte but noelectrolytic nickel, which is the type traded on the LME. 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. Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. Bloomberg. 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. (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. However, Xiang believed the risks to be manageable, the people said, even as anunidentified nickel stockpilercontrolled at least half of the inventories on the exchange. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Source: LME. Others in the market may also push up prices anticipating that short covering. 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. Enter the code below to reset your password. Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore. 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. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. 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. The annals of commodity markets are full of tales of producers and traders, fromMetallgesellschafttoSumitomo, that blurred the lines between hedging and speculation and ended with billions of dollars in losses. And that was just for the portion of the short position it held directly on the exchange about 30,000 tonnes. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. The Murrin Murrin Mine is a major nickel-cobalt mining operation being conducted in the North Eastern Goldfields, approximately 45 km east of Leonora, Western Australia.The project was initiated as a joint venture between Murrin Murrin Holdings Pty Ltd, a wholly owned subsidiary of Anaconda Nickel Limited (whose share was 60%) and Glenmurrin Pty Ltd, a wholly owned subsidiary of Glencore . When Norilsk Nickel left the Western markets, Glencore became its main substitute for nonferrous metals. Now, the traders watched with a mixture of horror and grim fascination as the price went skyward. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. Our nickel operations are in Canada, Australia, Norway, and New Caledonia. 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. 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. 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. 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. Worse, the chaos was spreading to other markets: Zinc prices spiked 15% in a few minutes to a record high, only to collapse again. Glencore plc was newly . Credit: INF News.com. 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. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. The difference is that nickel is a commodity that touches the entire global economy. 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. Undeterred, the Chinese tycoon has told banks he wants tomaintain his position, and has asked them to keep funding him despite the losses. Xiangs short position has now racked upbillions of dollars in losses. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. Glencore Mine Raglan Feb 2014 - Mar 2018 4 years 2 months. Those past scandals forced reforms on the exchange. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. Cash and short-term investments. Glencore is still a short opportunity but mid-2022 looks to be the end of long run commodity bear trend. Vale - 208,000 metric tonnes. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. The LME at the end of the day is a physical metal market, he says. The company has assured creditor banks in China that its . . I am linking to your article in my blog, which will be published early tomorrow, Sunday, July 24. He was awakened by a phone call at 5.30am. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. Everything changed when Russia invaded Ukraine on February 24. Nickel makes steel corrosion-resistant and plays an essential role in our modern world. They include: Koniambo is a large-scale integrated ferronickel mining and processing complex. 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. That could either result in a huge loss for Tsingshan or the sale of a more than 60 percent stake in the companys Indonesian nickel mine and interest in its industrial park in the southeast Asian country, the report said. 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. 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. In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. The company had plans to produce 850,000 tons of nickel in 2022, an increase of 40% in a year, according to a person briefed on them. Summary. INF News.com. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. 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. 6W - 9M. 6 kt/a nickel in concentrate). 2023 Glacier Media Group, All Rights Reserved. Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. 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. MT. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. 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. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. Tsingshan is in touch with relevant parties and has the support of Chinese government departments and leaders, he added. People forgot that this isnt a video game retailer; its an important physical commodity. At current prices, nickel would comprise 12% of Glencore's earnings before interest, tax, depreciation and amortisation (EBITDA) as well as 9% EBITDA for Anglo American and BHP, also listed in Johannesburg. 21 962. The total volume mined by Glencore in 2021 fell compared to 2020, in part due to supply chain problems and the closure of some mines. Others in the market may also push up prices in anticipation of that short covering. In terms of revenue, the global largest two companies occupy a share . 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 . Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. LME chief executive Matthew Chamberlain had stayed up to watch. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. Neither party seems very keen on this idea, however. 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. Located in Kristiansand, Nikkelverk is the largest nickel refinery in the western world producing high-quality nickel and cobalt. 115 000 MT. Baar, Zug, Switzerland. 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. Glencore Nikkelverk AS has a modern and complex processing system. Xiang was aware of flaws in his strategy, people familiar with the matter said. Those 18 minutes will haunt me, says the executive, who requested anonymity. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trimtheir bets. 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. 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. Mid Term. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. Xiang didnt believe the rally would last. Wayne has over 20 years of operational management experience of complex hydrometallurgical plants, specialising in transformation of operational and . 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. 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. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. Xiang isnt just a financial trader making paper bets on price moves. Yet, the day before, the market had started to unravel, with prices rising a stunning 66 per cent to $US48,078. Tsingshan Group placed a short nickel order, and the matter of being shorted by the opponent was brushed off. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. Xiangs short position has now racked up billions of dollars in losses. However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . . 1w. Shanghais most-traded nickel futures contract soared to CNY228,810 (USD36,235) a tonthe same day, and trading is suspended today. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. . (" Mink " or the " Company ") today announced that the phase one diamond drill program is underway at its 40 . Evaporating liquidity. Mar 16, 2022 - 8.00am. (This account of events in the nickel market is based on dozens of interviews with people involved, many of whom requested anonymity because the matters are private.). In theory, there should be two options for this 200,000 tons of nickel short order: 1. Traders and brokers on the open outcry pit at the London Metal Exchange. 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. Live from Dubai, connecting Asian markets to the European opens. It decided to cancel all the trades that took place on Tuesday morning$3.9 billion of them, according to a Bloomberg calculation. 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. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market.

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