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Nickel prices usually move a few hundred dollars per tonne in a day. Yet, the day before, the market had started to unravel, with prices rising a stunning 66 per cent to $US48,078. 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. 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. 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 . In terms of revenue, the global largest two companies occupy a share . Crucially, the decision meant traders wouldnt need to pay margin calls on the basis of the $80,000 nickel price. 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. Remember, when prices move up, traders such as Xiang who have sold futures contracts face margin calls; they must put up more cash to cover potential losses. 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. A Glencore spokesman declined to comment. The metal is found in all our homes as a key ingredient of stainless steel. Just after 6 a.m., the price of nickel passed $100,000 a ton. 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 . You have achieved great things in these short 4 years (whilst remaining humble and kind); I am super Congratulations and thank you Aurlien Bouic! It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. This type is different from the mainstream ferro-nickel and nickel pig iron. 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. Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. 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. The company had plans to produce 850,000 tonnes of nickel in 2022, an increase of 40 per cent in a year, says a person briefed on them. Glencore Nickel. Live from Dubai, connecting Asian markets to the European opens. Some aggrieved traders are already preparing to take legal action against the exchange. 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 . Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Already at an all-time high by 5:42 a.m., it lurched higher in stomach-churning leaps, soaring $30,000 in a matter of minutes. 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. Why bet against nickel when you have a nickel business? Located in Kristiansand, Nikkelverk is the largest nickel refinery in the western world producing high-quality nickel and cobalt. Those past scandals forced reforms on the exchange. I'll discuss why. Nickels price moved sharply higher in the week after Russias military invasion. Like Comment Share. MT. They had offset their deals with Tsingshan by placing their short positions on the LME. Project manager for transition of Sudbury INO from CAMP to Deswik. The difference is that nickel is a commodity that touches the entire global economy. 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. 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. Our nickel operations are in Canada, Australia, Norway, and New Caledonia. Once its industrial complex reaches peak p. Copper. . Yet the day before, the market had started to unravel . Massive short positions held by Xiangs Tsingshan Holding Group, the worlds largest nickel producer, have gone disastrously awry over the past few days. 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. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. It traded briefly above $100,000 a ton early on Tuesday. We have interests in a range of mining assets on four continents. The product to deliver with LME nickel contracts is cathode nickel containing at least 99.8 percent nickel, in accordancewiththeAmerican Society for Testing and Materials' specifications. Perth, Western Australia, Australia. 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. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. And when those wagers move violently in the opposite direction, they can be hit with huge margin calls, or requests to put down more cash to back their trades. 2023 Glacier Media Group, All Rights Reserved. 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 . Elon Musk wanted to buy 10-20% of Glencore, but refused to. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. 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. 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. Hes in the physical nickel business. Glencore is still a short opportunity but mid-2022 looks to be the end of long run commodity bear trend. China's manufacturing activity expanded at the fastest pace in more than a decade in February. Nickelcopper ores have been mined there since 1928. 2W - 6W. Despite the recent upheaval, his company still remains the biggest in the nickel industry. 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 . The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. . 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. 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. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. Save my name, email, and website in this browser for the next time I comment. 92 132 MT. Mark Hansen, chief executive officer of Concord Resources. 6 kt/a nickel in concentrate). At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. Shanghai's most-traded nickel futures contract . Then came a geopolitical crisis that caught him unawares. 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. Baar, Switzerland 29 July 2022. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its Covid-era low. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. 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. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. The dollar hit a one-week low earlier Wednesday after China's yuan gained. Get in touch with us now. . 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 . Share. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after this week's unprecedented price spike, according to people . spiked by as much as 250 per cent in little more than 24 hours. 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. The LME suspended nickel-market trading on Tuesday and the Shanghai Futures Exchange followed suit a day later, after prices on Chinas top commodities bourse hit their daily upward limit. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trim their bets. 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. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. The company has a diversified basket of commodities, including nickel, which is famous because of electric vehicles. 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. Credit: INF News.com. 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. 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. 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. (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.). But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. It is believed that Tsingshan has accumulated large short positions in nickel derivatives markets to hedge against possible price . Undeterred, the Chinese tycoon has told banks he wants tomaintain his position, and has asked them to keep funding him despite the losses. Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. (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.). Xstrata Nickel Montcalm Mine 2007 - 2010 3 years. Yet the day before, the market had started to unravel, with prices rising by astunning66% to $48,078. Nickels price moved sharply higher in the week after Russias invasion. Beijing is supportive of him, Xiang told contacts recently. LME chief executive Matthew Chamberlain had stayed up to watch. The LME made a near-unprecedented decision. Nickel prices usually move a few hundred dollars per ton in a day. 2017 - 2018 Yicai Global, Yicai Media Group. (By Jack Farchy, Alfred Cang and Mark Burton, with assistance from Sridhar Natarajan), Your email address will not be published. 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. When it was flying towards $US100,000, you could feel the damage, and you knew companies were fighting for their existence, says John Browning, founding partner of brokerage Bands Financial and a former LME board member. Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. Short Term. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Iquique Chile Falconbridge . Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. 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. 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. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. Glencore-backed Leeuwin ready to set sail. 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. Of long run commodity bear trend cash drain from topping up margin payments pose the! Of Tuesdaywere furious pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle trading. Different from the mainstream ferro-nickel and nickel concentrates, as the pain for Tsingshan, its brokers and... Matthew Chamberlain had stayed up to watch of loans from Chinese and international banks will Tsingshan! To watch during that Asian session were becoming disconnected from, I believe, physical reality invasion... 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