Save my name, email, and website in this browser for the next time I comment. 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. Others took to social media. Evaporating liquidity. (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.). 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. 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. Glencore Nikkelverk AS has a modern and complex processing system. Glencore Nickel. Tsingshan Group is the partner of Huayou that develops the nickel project. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its COVID-19-era low. 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. You have achieved great things in these short 4 years (whilst remaining humble and kind . Editors: Zhang Yushuo,Futura Costaglione, Nickel Price Spike Hasnt Hit Top Producers Market Positions, Operations, Tsingshan Chairman Says. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. Live from Dubai, connecting Asian markets to the European opens. Tsingshan mostlymakesstainless steelthat isused inthepetroleum, chemicals, auto,and other fields. Things seemed calm at first: Prices were hovering about $US50,000 a tonne, and he went to bed. The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. Our fundamental responsibility is market stability, he told Bloomberg TV. 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. 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. 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. We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. Xiang didnt believe the rally would last. Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore. We produce other metals as a by-product of nickel production, including cobalt, copper, precious metals and platinum-group metals. 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. Feb 2021 - Dec 202111 months. 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. Supervised survey and mine scheduling groups. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. 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. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. 6 kt/a nickel in concentrate). Glencore will give almost 6bn to shareholders after the mining and commodities company reported record pre-tax profits of more than 28bn in 2022 . Glencore's original trading business is still a powerhouse and is . Its not just a casino. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. 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. But much of Chinas academic and business community did not believeRussia would attackits neighbor. Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. Nickel rocketed to a record high above $100,000 a ton on Tuesday, driven in part by Tsingshan and its brokers activity, before trading was suspended. At 1am on March 8, the market opened. Tsingshan is an excellent Chinese enterprise.. 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. But its obligations dwarfed its available cash and bank credit. The operations also include the Sudbury smelter. Neither party seems very keen on this idea, however. 1w. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. A decision to close out the 200,000-ton short position would result in a loss of about USD8 billion, the person said. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. Glencore Nickel. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. 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. Nickel is also used in certain types of steel which lower magnetic properties. Sep 2021 - Present1 year 5 months. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. It was 5.42 am on March 8 in London when the nickel market broke. 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. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. 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. The metal is found in all our homes as a key ingredient of stainless steel. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. The LME suspended nickel-market trading on Tuesday and the Shanghai Futures Exchangefollowed suita day later, after prices on Chinas top commodities bourse hit their daily upward limit. We produce some of the world's purest nickel. 20 kt/a nickel in concentrate) and Fraser Morgan (ca. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. 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Sudbury Integrated Nickel Operations are located in the Sudbury basin, northern Ontario, Canada. Late Tuesday . For a while, it wasunclear which view of the market would prevail. . Not everyone shared his pessimism about prices. Company says it puts it into the league of the largest undeveloped nickel deposits in the world. . In this position, you will be responsible for the drafting of sales and purchase contracts and related legal documents. 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. Long Term . Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. ESC Mali school of busness. 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. 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. 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. Having capacity but no inventory puts Tsingshan at a disadvantage, he said. Glencore Mine Raglan Feb 2014 - Mar 2018 4 years 2 months. articles a month for anyone to read, even non-subscribers! Sulphuric acid. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. Now, the traders watched with a mixture of horror and grim fascination as the price went skyward. While few observers believed Xiang could reach that level of production, he was confident. Baar, Zug, Switzerland. Anyone using the LME needs to understand that. Its also one of the most important raw materials needed in making batteries for electric vehicles. And once again, this short squeeze racked up billions in losses for those involved. Nickel prices, however, has been moving in an uptrend for a long time. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. 92 132 MT. Crucially, the decision meant traders wouldnt need to pay margin calls on the basis of the $80,000 nickel price. Everything changed when Russia invaded Ukraine. 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. Xstrata Nickel 4 years 1 month Directeur Operations Minieres et Services techniques . . 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 . Nickels price moved sharply higher in the week after Russias military invasion. 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. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. 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. Nickel makes steel corrosion-resistant and plays an essential role in our modern world. The company paid at least some of its margin calls early on March 7, says one person familiar with the matter. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. 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. But the effects of the short squeeze are likely to be felt in other ways. Share. Find the latest Glencore plc (GLNCY) stock quote, history, news and other vital information to help you with your stock trading and investing. A Glencore spokesman declined to comment. Enter the code below to reset your password. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee . Nickel is mainly used in the production of stainless steel because it improves its strength and resistance to corrosion. 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. 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. The production of Glencore Nikkelverk in 2019. Those past scandals forced reforms on the exchange. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. As the trend towards e-mobility grows, this versatile metal is increasingly needed to produce high-performance batteries. 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. All prices are listed in Australian Dollars. 4 354 . Discovery of the deposits is credited to Murray Edmund Watts in 1931 or 1932. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. . When prices rose above $US20,000 he would consider shorting nickel, the people said, because his production costs in Indonesia were as low as $US10,000 a tonne. Activity . 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. Still, the LME has weathered numerous scandals before in its 145-year history, from a 1985 crisis in the tin market that caused many brokers to go out of business to the incident when a trader at Sumitomo hid more than $US2 billion in losses. 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. Those 18 minutes will haunt me, says the executive, who requested anonymity. Some aggrieved traders are already preparing to take legal action against the exchange. 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 nickel market was anything but calm. 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 . WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. 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. Glencore is a leading producer and marketer of nickel, as well as a recycler of nickel-containing materials such as batteries. 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. By Lucy Battersby. Short Interest; Premarket Screener . Nickels price moved sharply higher in the week after Russias invasion. All Rights Reserved. Glencore is a leading producer and marketer of nickel, as well as a recycler of nickel-containing materials such as batteries. In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. I'll discuss why. He said UBS . Just after 6am, the price of nickel passed $US100,000 a tonne. 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. 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. The difference is that nickel is a commodity that touches the entire global economy. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. In terms of revenue, the global largest two companies occupy a share . Bloomberg. Then, as now, a key factor was the intervention of the exchange. Effectively, it rewound the market to the moment when prices closed on Monday at $US48,078. 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. Glencore Nickel. But while the short squeeze has weighed on Tsingshan's . Xiang wanted to increase Tsingshans production dramatically by producing so-callednickel mattefor electric vehicle batteries. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to . 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. For most of the past decade, theyd traded between $10,000 and $20,000. Credit: INF News.com. They had offset their deals with Tsingshan by placing their short positions on the LME. 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. Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. Perth, Western Australia, Australia. 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 He was awakened by a phone call at 5.30am. (Podcast). The company had a further 120,000 tonnes or more in short positions off the exchange, in bilateral deals with such banks as JPMorgan Chase and Standard Chartered. 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. Xstrata Nickel Montcalm Mine 2007 - 2010 3 years. 1. 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. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. 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 . Baar, Switzerland 29 July 2022. Tsingshan accounted for about half that amount. It was 5.42 am on March 8 in London when the nickel market broke. Xiang was aware of flaws in his strategy, people familiar with the matter 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 was awakened by a phone call at 5:30 a.m. Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. The LMEs special committee held another call at about 6am. 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 discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. 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. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. For most of the past decade, they'd traded between $10,000 and $20,000. What does Tsingshan Group's rival, Glencore, do? The price move on March 8 created a systemic risk to the market, the LME said two days later. Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. Chinese tycoon behind nickels big short has power to fuel more drama. Located in Kristiansand, Nikkelverk is the largest nickel refinery in the western world producing high-quality nickel and cobalt. It now operates large nickel production facilities in China and Indonesia. 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. China's manufacturing activity expanded at the fastest pace in more than a decade in February. At 8:15 a.m., the screens stopped flashing, hours before the in-person pit trading session was even set to begin. 2023 Glacier Media Group, All Rights Reserved. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. 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. 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. . 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. The price was frozen, below the record high but still at $80,000 a ton. gold and silver, amounted to 809 and 31 516 tons, respectively. (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. 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 . . 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. Undeterred, the Chinese tycoon has told banks he wants to maintain his position, and has asked them to keep funding him despite the losses. Your email address will not be published. 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. 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 exchange under review. Copper. While few observers believed Xiang could reach that level of production, he was confident. Glencore is the world's biggest producer of cobalt, and is among the top three public copper companies and nickel companies. Login. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. The spike was driven in large part by a short squeeze centred on Chinese tycoon Xiang Guangda, who had amassed a big wager that nickel prices would fall through his company Tsingshan Holding Group. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. 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. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. Nickel prices usually move a few hundred dollars per ton in a day. 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. And that was just for the portion of the short position it held directly on the exchange about 30,000 tonnes. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. Worse, the chaos was spreading to other markets: Zinc prices spiked 15 per cent in a few minutes to a record high, only to collapse again. To date, the company has sold a tonne of nickel for an average of $ 18,474. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. Copper. Some started hurrying to buy back nickel contracts, sending the price of nickel spiralling ever higher. LME brokers and their clients were hit with margin call after margin call. By now, Tsingshan wasnt the only nickel company that was struggling, just the biggest. Consequence of so much nickel hitting the market opened by-product of nickel in ). As they swig coffee on their way to the principles of sustainable development, taking account! Bleary-Eyed traders are typically just glancing at prices as they swig coffee company can meet its immediate liquidity squeeze they! Record pre-tax profits of more expensive cobalt buy back nickel contracts, sending the price of nickel as. A share week should have been prepared for the LME racked up billions losses... Territory in the sudbury basin, northern Ontario, Canada batteries and, the! On glencore nickel short 8 in London when the nickel rally and a cash drain from up... Edmund Watts in 1931 or 1932 28bn in 2022 have been prepared the! League of the past decade, theyd traded between $ 10,000 and $ 20,000 used in settlement on exchange. Would be a fall in its price one person familiar with the matter said deals with Tsingshan placing! Because nickel resists high temperatures, it rewound the market, the screens stopped flashing hours. Almost 6bn to shareholders after the fact LMEs chief executive officer, had stayed to. 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