glencore nickel short

Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. Nickelcopper ores have been mined there since 1928. 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. ICP( B2-20050348 (AVSP):2014002, By signing up, you agree to our Terms, Privacy Policy. 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. Copper. Required fields are marked *. The price was frozen, below the record high but still at $US80,000 a tonne. gold and silver, amounted to 809 and 31 516 tons, respectively. Some think this could herald the end of the exchange itself. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. The Chinese government may also play a role. Yet the day before, the market had started to unravel . As at January 31, 2023 Glencore holds 72,008,404 Common Shares, representing approximately 70.8% of the issued and outstanding Common Shares. Those past scandals forced reforms on the exchange. In terms of revenue, the global largest two companies occupy a share . Your email address will not be published. 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. Glencore Nickel. Learn how we produce copper and the uses it is put to. (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.). 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. Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. 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. Please try again later. . 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. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. 6W - 9M. That put Tsingshans banks and brokers, which includeJPMorgan Chase,BNP Paribas, andStandard Chartered,in a bind. Then on March 7, nickels price began its parabolic ascent, surging from $30,000 a ton to more than $50,000. 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. It traded briefly above $100,000 a ton early on Tuesday. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. But the effects of the short squeeze are likely to be felt in other ways. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. 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. Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. 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. Some started hurrying to buy back nickel contracts, sending the price of nickel spiralling ever higher. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Their GLEN share price forecasts range from GBX 540 to GBX 740. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. 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. 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. 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 Nickel. 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. Save my name, email, and website in this browser for the next time I comment. Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. If you don't see the email, check your junk, spam or other folders. The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. LME brokers and their clients were hit with margin call after margin call. 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 . 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. Nickel prices, however, has been moving in an uptrend for a long time. The Nikkelverk Operations. The seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its Covid-era low. Xiang Guangda caught out by metals spectacular rally, London Metal Exchange suspended nickel trading on Tuesday. 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. 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. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Required fields are marked *. 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. China's manufacturing purchasing managers' index (PMI) climbed to 52.6 last month, the highest reading since April 2012. Everything changed when Russia invaded Ukraine. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. Your email address will not be published. Mark Hansen, chief executive officer of Concord Resources, Help using this website - Accessibility statement. 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. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. Then on March 7, nickels price began its parabolic ascent, surging from $US30,000 a tonne to more than $US50,000. 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. And that was just for the portion of the short position it held directly on the exchange about 30,000 tonnes. Production 2019. But today things have reversed, that is, Tsingshan Group has prepared 200,000 . 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. . Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. Short Interest; Premarket Screener . Now, the traders watched with a mixture of horror and grim fascination as the price went skyward. Neither party seems very keen on this idea, however. The head of one London metals brokerage recalls feeling sick as he watched the moves, realising what the spike in prices would mean for his company, the market, and the global metals industry. For the LME, the future isunclear. 2023 Glacier Media Group, All Rights Reserved. Your email address will not be published. This matters beyond the cozy world of . 21 962. 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. Since 1910, nickel and other metals have been refined, produced and exported from the production plant in Kristiansand. 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. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Company says it puts it into the league of the largest undeveloped nickel deposits in the world. Glencore Mine Raglan Feb 2014 - Mar 2018 4 years 2 months. Tsingshan is in touch with relevant parties and has the support of Chinese government departments and leaders, he added. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. Sudbury Integrated Nickel Operations are located in the Sudbury basin, northern Ontario, Canada. Xiang Guangda -- who controls the worlds largest nickel producer, Tsingshan Holding Group Co., and is known as Big Shot in Chinese commodity circles -- has closed out part of his companys short position and is considering whether to exit the wager altogether, the people said. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . . 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. Sulphuric acid. He draws a comparison with Silver Thursday, the day in 1980 when an attempt bythe Hunt brothersto corner the silver market came unstuck. 485,996 followers. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. 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. Shanghai's most-traded nickel futures contract . As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. 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. Yet the day before, the market had started to unravel, with prices rising by astunning66% to $48,078. But the effects of the short squeeze are likely to be felt in other ways. Tsingshan accounted for about half that amount. Including positions on the London Metal Exchange and bilateral bets with banks, Xiang still has short holdings in the region of 150,000 tons, the people said. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. 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. Cobalt. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. The operations also include the Sudbury smelter. 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. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. Report this profile Report Report. 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 . Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. Some started hurrying to buy back nickel contracts, sending the price of nickel spiraling ever higher. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. Those 18 minutes will haunt me, says the executive, who requested anonymity. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Its not just a casino. 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 fallout was immediate. 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 . That put Tsingshans banks and brokers, which include JPMorgan Chase, BNP Paribas, and Standard Chartered, in a bind. Evaporating liquidity. Having capacity but no inventory puts Tsingshan at a disadvantage, he said. The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. Xiang Guangda, the billionaire owner of Tsingshan Holding Group. MINK. It decided to cancel all the trades that took place on Tuesday morning some $US3.9 billion of them. Xiang isnt just a financial trader making paper bets on price moves. 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Tsingshan Group has prepared 200,000 this year, it had taken ownership more! A bind officer of Concord Resources argues that financial investors who traded nickel last week should have refined.
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