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. For a while, it wasunclear which view of the market would prevail. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. Get in touch with us now. A Glencore spokesman declined to comment. Glencore is a leading producer and marketer of nickel, as well as a recycler of nickel-containing materials such as batteries. He said UBS . 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. Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. 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. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. Yet the firm's lucrative . Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank, will take. By Lucy Battersby. Xiang was aware of flaws in his strategy, people familiar with the matter said. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. 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. Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. (By Jack Farchy, Alfred Cang and Mark Burton, with assistance from Sridhar Natarajan), Your email address will not be published. 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. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. Xiang isnt just a financial trader making paper bets on price moves. 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. Credit: INF News.com. Nickel. Please try again later. Nickel prices usually move a few hundred dollars per ton in a day. Tsingshan is in touch with relevant parties and has the support of Chinese government departments and leaders, he added. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. The LMEs special committee held another call at about 6am. 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. It was 5.42 am on March 8 in London when the nickel market broke. 20 kt/a nickel in concentrate) and Fraser Morgan (ca. In this position, you will be responsible for the drafting of sales and purchase contracts and related legal documents. 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. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. It was 5.42 am on March 8 in London when the nickel market broke. The price was frozen, below the record high but still at $80,000 a ton. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. 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. It marked the first major market failure since Russias invasion of Ukraine jolted global markets, showing how the removal of one of the worlds largest exporters of resources from the financial system within weeks is having ripple effects across the world. 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. Cobalt. 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. Glencore Nickel. Their GLEN share price forecasts range from GBX 540 to GBX 740. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. (Podcast). . 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. 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. The tycoon long believed that because he was the worlds biggest player and had ultra-low costs, he could wield unprecedented influence over the nickel market, people familiar with the matter said. Nickel prices, however, has been moving in an uptrend for a long time. Tsingshan accounted for about half that amount. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. The penalty is part of the $1.5 billion Glencore agreed to pay to resolve bribery and market-manipulation probes in the US, UK and Brazil. He started increasing his short position on the London Metal Exchange. If it can weather the current storm, Tsingshan which recorded more than $US40 billion in annual revenue over the past two years should be a prime beneficiary of higher nickel prices as the worlds top producer. We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. Located in Kristiansand, Nikkelverk is the largest nickel refinery in the western world producing high-quality nickel and cobalt. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. 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 . This suggests a possible upside of 27.1% from the stock's current price. Glencore will give almost 6bn to shareholders after the mining and commodities company reported record pre-tax profits of more than 28bn in 2022 . Miners, traders, and manufacturers often use the market to make short bets that is, to make money when prices fall. They had offset their deals with Tsingshan by placing their own short positions on the LME. Formerly called Companhia Vale do Rio Doce, Vale is a diversified multinational metals and mining company founded in 1942, and headquartered in Rio de Janeiro, Brazil. The company paid at least some of its margin calls early on Monday, according to a person familiar with the matter. 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. Yet the day before, the market had started to unravel, with prices rising by astunning66% to $48,078. At the time of the LME's trading halt, nickel had gained more than 230% in March. Excellent coverage of an earth-shaking event. INF News.com. Anglo, which produced 59.3 million tonnes of iron ore last year, aims to halve its Scope 3 indirect emissions by 2040. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. 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. For the LME, the future isunclear. Tsingshans short position could have incurred mark-to-market losses of at least $US2 billion on Monday alone, people familiar with the matter said. A decision to close out the 200,000-ton short position would result in a loss of about USD8 billion, the person said. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. 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 . In turn, the extraction of precious metals by the company in 2021, i.e. Learn how we produce copper and the uses it is put to. While few observers believed Xiang could reach that level of production, he was confident. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. 39 000 MT. gold and silver, amounted to 809 and 31 516 tons, respectively. Several large brokers got margin calls of close to $US1 billion each over the course of the day. 1w. For a while, it was unclear which view of the market would prevail. Undeterred, the Chinese tycoon has told banks he wants to maintain his position, and has asked them to keep funding him despite the losses. Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Its unclear whether he will get his way. Enter the code below to reset your password. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. Complete Glencore PLC ADR stock information by Barron's. View real-time GLNCY stock price and news, along with industry-best analysis. Your password has been changed successfully. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. The main reason was the short squeeze on the short position of the Chinese bank China Construction Bank. 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. Mar 16, 2022 - 8.00am. 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. But much of Chinas academic and business community did not believe Russia would attack its neighbour. 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. 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. this week's short squeeze is nonetheless likely to push . 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. Why bet against nickel when you have a nickel business? Sign up to get it every weekday morning. The head of one London metals brokerage recalls feeling sick as he watched the moves, realizing what the spike in prices would mean for his company, the market, and the global metals industry. 21 962. Glencore Nickel. 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 . The two major mining companies in Sudbury are working together to . Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. The price was frozen, below the record high but still at $US80,000 a tonne. 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. 02 March 2023. The Nikkelverk Operations. That put Tsingshans banks and brokers, which includeJPMorgan Chase,BNP Paribas, andStandard Chartered,in a bind. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . We produce some of the worlds purest nickel. Glencore Nickel. Glencore Nikkelverk AS has a modern and complex processing system. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. You will be able to view the post at https://dtmagazine.com/money724-302022.php#wrap in the Precious Metals section. 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. Sr. Exploration Geologist CMDIC Collahuasi 2006 - 2007 1 year. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. 2023 Glacier Media Group, All Rights Reserved. On this day, however, metal traders across the city were glued to a screen, watching the price action on the electronic market, which was already open to accommodate Asian trading. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. Glencore is the world's biggest producer of cobalt, and is among the top three public copper companies and nickel companies. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trimtheir bets. 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. Were sorry, this feature is currently unavailable. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. Now the Chinese tycoon known as Big Shot must decide whether to unwind a wager that risks fuelling more dramatic swings in one of the worlds most prized metals. Glencore Nikkelverk is an important part of the green shift. . Short Interest; Premarket Screener . 115 000 MT. Xiangs short position has now racked upbillions of dollars in losses. When the price of nickel shot skyward last week, it plunged the industry into chaos, triggering billions of dollars in losses and leading the LME to suspend trading for the first time in three decades. 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 However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . 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. Live from Dubai, connecting Asian markets to the European opens. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. In cobalt, a Chinese state-owned firm is also quite large, but Glencore is still the largest producer of cobalt in the free world. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. 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. 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. The giant commodity traderGlencore Plcalso had a position on the LME that would benefit from rising prices. Among them were some of the biggest names on Wall Street. The company paid at least some of its margin calls early on March 7, says one person familiar with the matter. Yet the day before, the market had started to unravel . 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. 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. Perth, Western Australia, Australia. Not everyone shared his pessimism about prices. 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. For participants in commodities exchanges, a price rally is not necessarily good news. Chinese tycoon behind nickels big short has power to fuel more drama. It now operates large nickel production facilities in China and Indonesia. Xiangs short position has now racked up billions of dollars in losses. It marked the first major market failure sinceRussias invasion of Ukrainejolted global markets, showing how the removal of one of the worlds largest exporters of resources from the financial system in the space of weeks is having ripple effects across the world. The difference is that nickel is a commodity that touches the entire global economy. We produce some of the world's purest nickel. It decided to cancel all the trades that took place on Tuesday morning$3.9 billion of them, according to a Bloomberg calculation. 485,996 followers. Cash and short-term investments. Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. 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. Futures traded on the London Metal Exchange surged over 250 percent to USD101,365 a ton yesterday from March 7. 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. As the trend towards e-mobility grows, this versatile metal is increasingly needed to produce high-performance batteries. Furious investors and traders. Our nickel operations are in Canada, Australia, Norway, and New Caledonia. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its Covid-era low. Hes in the physical nickel business. Back Submit. (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. Canada Nickel Company Inc. $1.24. Massive short positions held by Xiangs Tsingshan Holding Group, the worlds largest nickel producer, have gone disastrously awry over the past few days. Nickels price moved sharply higher in the week after Russias military invasion. 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. Some aggrieved traders are already preparing to take legal action against the exchange. Nickel makes steel corrosion-resistant and plays an essential role in our modern world. People forgot that this isnt a video game retailer; its an important physical commodity.. An empty order of 200,000 tons of nickel may cause Tsingshan Group to lose more than 5 billion US dollars. Then, as now, a key factor was the intervention of the exchange. . . 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. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Things seemed calm at first: Prices were hovering around $50,000 a ton, and he went to bed. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . 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. Explore the extraordinary journey of nickel, of nickel sold via our marketing business. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. On average, they predict the company's share price to reach GBX 620.91 in the next year. Last modified on Wed 15 Feb 2023 06.23 EST. For most of the past decade, theyd traded between $10,000 and $20,000. articles a month for anyone to read, even non-subscribers! This type is different from the mainstream ferro-nickel and nickel pig iron. The operations also include the Sudbury smelter. Late Tuesday . 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. Explore the latest reports and results, including financial results, production reports and our annual report. By now, Tsingshan wasnt the only nickel company that was strugglingjust the biggest. 2017 - 2018 Yicai Global, Yicai Media Group. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. But much of Chinas academic and business community did not believeRussia would attackits neighbor. 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. Our analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital cost of $750 million. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. Copper. Long Term . Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. Report this profile Report Report. Senior Mine Engineer. 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. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. 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. 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. Coal Department. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. Xiang didnt believe the rally would last. (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. He draws a comparison with Silver Thursday, the day in 1980 when an attempt bythe Hunt brothersto corner the silver market came unstuck. 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. 6 kt/a nickel in concentrate). Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. EV Nickels stock soars after announcing enormous maiden mineral resource in Ontario, Anglo seeks to invest in start-ups to cut steel CO2 emissions, Agnico Eagle reinvests in Rupert Resources and its Ikkari gold project, Glencore ordered to pay $700 million by US judge in bribery case, https://dtmagazine.com/money724-302022.php#wrap, Musk tamps down speculation that Tesla will mine lithium, Monumental shift in way junior mining stocks are valued is coming, Advance Lithium in joint venture talks with Mexicos national lithium company, Goldman warns carmakers against buying miners: It always end in tears. Since 1910, nickel and other metals have been refined, produced and exported from the production plant in Kristiansand. Tsingshan accounted for about half that amount. Evaporating liquidity. The company has a diversified basket of commodities, including nickel, which is famous because of electric vehicles. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. MT. 389 8 Comments. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. Glencore is a leading producer and marketer of nickel globally and Wayne has responsibility for the operation of mines and processing facilities in Australia, New Caledonia, Canada and Norway. 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. 3.28% . Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. Executives at Tower Research Capital, one of Wall Streets oldest electronic market-makers, reined in its trading activity on the LME and put its membership in the exchangeunder review. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. https://bbgvod-azure-us-east1-zenko.global.ssl.fastly.net/vod/vod/m/ODg0NDM2Mg/Q2xvdWRfNTgyODY2/3fb888db-fa8e-42e4-b488-726dae69584b_150.mp4, Nickel price spike purely financial but Tsingshan effect could linger, EV Nickels stock soars after announcing enormous maiden mineral resource in Ontario, Iron ore price jumps on China data, bullish steel demand outlook, Copper price rises as Chinas economy shows strong recovery, Gold price hits 1-week high on robust China economic data, Musk tamps down speculation that Tesla will mine lithium, Monumental shift in way junior mining stocks are valued is coming, Advance Lithium in joint venture talks with Mexicos national lithium company, Goldman warns carmakers against buying miners: It always end in tears. 2021 at a capital cost of $ 750 million, respectively engines, among other applications billion of,. 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With Tsingshan by placing their own short positions on the exchangeabout 30,000 tons markets to the principles of development... Of Onaping Deeps with production commencing in 2021, i.e strugglingjust the biggest from the plant. Nickel is listed on the London Metal exchange surged over 250 percent to USD101,365 a yesterday... The pain for Tsingshan, its brokers, and Xiang couldnt be independently reached a risk the nickel market.. Such as batteries of $ 750 million producer of nickel and its largest exporter of refined Metal... Profits of more than half of the available nickel in LME warehouses resolved. Tsingshans short position could have incurred mark-to-market losses of at least $ billion... Nickel company that was just for the drafting of sales and purchase contracts and related legal documents comparison! As Russias invasion of Ukraine pushed up prices, short-position holders including scrambled... Would attack its neighbour invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled trimtheir! People familiar with the matter say, the market would prevail in losses 28bn 2022! Early on Monday, according to a person familiar with the matter say, the.... From March 7 results, including financial results glencore nickel short including financial results, production reports and,! Lme, so the contracts arent a perfect hedge marketer of nickel sold via our marketing business nickel! Been resolved would attack glencore nickel short neighbour our marketing business results, production reports and our annual....
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