Nickelcopper ores have been mined there since 1928. Nickel prices usually move a few hundred dollars per tonne in a day. Several large brokers got margin calls of close to $1 billion each over the course of the day. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. 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. Find the latest Glencore plc (GLNCY) stock quote, history, news and other vital information to help you with your stock trading and investing. 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. It was 5.42 am on March 8 in London when the nickel market broke. 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. 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. Short Interest; Premarket Screener . Resetting your password will log you out of all your active Yicai Global sessions. It was 5.42 am on March 8 in London when the nickel market broke. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. 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. The fallout was immediate. 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. But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. . Xiang Guangda, the billionaire owner of Tsingshan Holding Group. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. 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 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. MT. Things seemed calm at first: Prices were hovering around $50,000 a ton, and he went to bed. 115 000 MT. By now, Tsingshan wasnt the only nickel company that was strugglingjust the biggest. Save my name, email, and website in this browser for the next time I comment. Bloomberg Daybreak Middle East. Earlier this week, nickel prices in London spiked byas much as 250%in little more than 24 hours. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. Login. The Nikkelverk Operations. Those 18 minutes will haunt me, says the executive, who requested anonymity. Long Term . The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. That led to some missteps in Xiangs strategic decisions over his trading exposure, three of the people said. Nikkelverk is committed to the principles of sustainable development, taking into account social, environmental and economic factors. He was awakened by a phone call at 5:30 a.m. 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. People familiar with the discussions said the exchange would ideally prefer to wait until Xiang has reached a resolution with his banks and brokers. Neither party seems very keen on this idea, however. Their GLEN share price forecasts range from GBX 540 to GBX 740. 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. LME chief executive Matthew Chamberlain had stayed up to watch. The company has assured creditor banks in China that its . 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 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. Tsingshan accounted for about half that amount. Charged with maximising the value of Glencore's physical nickel assets across the global portfolio through supporting collaboration efforts to manage risk and improve operability and performance. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. Effectively, it rewound the market to the moment when prices closed on Monday at $US48,078. 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. Even at that level, clients of LME brokers had failed to pay some $500 million of margin calls in relation to their short positions on the exchange, according to a person familiar with the matter. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. This type is different from the mainstream ferro-nickel and nickel pig iron. Why bet against nickel when you have a nickel business? Massive short positions held by Xiangs Tsingshan Holding Group, the worlds largest nickel producer, have gone disastrously awry over the past few days. Executives from Goldman Sachs Group voiced their displeasure at the decision on a call with Chamberlain. Xiang was aware of flaws in his strategy, people familiar with the matter said. Get in touch with us now. UNFORGIVEABLE,tweetedMark Thompson, a former trader at Trafigura and Apollo. Crucially, the decision meant traders wouldnt need to pay margin calls based on the $US80,000 nickel price. Your password has been changed successfully. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. 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. Our analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital cost of $750 million. Nickel prices had been rising for weeks, amid fears that supplies from Russia the largest exporter of refined nickel would be disrupted if the countryinvaded Ukraine. Xiang isnt just a financial trader making paper bets on price moves. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. As at January 31, 2023 Glencore holds 72,008,404 Common Shares, representing approximately 70.8% of the issued and outstanding Common Shares. I see all automakers within a short time creating their own 4680 . Nickels price moved sharply higher in the week after Russias military invasion. Nickel boosts the energy within batteries and, at the same time, allows battery makers to reduce the use of more expensive cobalt. You have achieved great things in these short 4 years (whilst remaining humble and kind); I am super Congratulations and thank you Aurlien Bouic! He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. 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. Others took to social media. 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 For most of the past decade, theyd traded between $10,000 and $20,000. Our positions and operations dont have any problems, Xiang Guangda, who is also the Wenshou-based companys founder, told Yicai Global yesterday. This suggests a possible upside of 27.1% from the stock's current price. 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. 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. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Anyone using the LME needs to understand that. But while the short squeeze has weighed on Tsingshan's . Production 2019. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. Mid Term. Tsingshan Group placed a short nickel order, and the matter of being shorted by the opponent was brushed off. Explore the latest reports and results, including financial results, production reports and our annual report. 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. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. Several large brokers got margin calls of close to $US1 billion each over the course of the day. . Sudbury Integrated Nickel Operations are located in the Sudbury basin, northern Ontario, Canada. Feb 2021 - Dec 202111 months. Elon Musk wanted to buy 10-20% of Glencore, but refused to. Xiang isnt just a financial trader making paper bets on price moves. The LME made a near-unprecedented decision. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Undeterred, the Chinese tycoon has told banks he wants to maintain his position, and has asked them to keep funding him despite the losses. It now operates large nickel production facilities in China and Indonesia. Now they had to pay big margin calls on the exchange while receiving no margin from their client. Short Term. For Xiangs big short position, that was painful. 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. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. Like Comment Share. In discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. Iquique Chile Falconbridge . The LME convened its special committee, a small group of metals and legal experts with the power to issue emergency rules for the market. The operations also include the Sudbury smelter. However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . Its unclear whether he will get his way. 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. Sign up to get it every weekday morning. He started increasing his short position on the London Metal Exchange. The LME halted trading of the metal yesterday and announced that it is unable to deliver on spot nickel contracts scheduled for March 9. The price move on March 8 created a systemic risk to the market, the LME said two days later. Explore the extraordinary journey of nickel, of nickel sold via our marketing business. I am linking to your article in my blog, which will be published early tomorrow, Sunday, July 24. The spike was driven in large part by a short squeeze centered on Chinese tycoon Xiang Guangda, who hadamassed a big wagerthat nickel prices would fall through his companyTsingshan Holding Group Co.On Monday, a week after trading had been suspended, Xiang wasclose to securing a loan facilityfrom JPMorgan Chase & Co. and other banks that would allow him to maintain his short position and could lead to the market reopening. 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. 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. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. And once again, this short squeeze racked up billions in losses for those involved. 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. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. Cliff Asness, founder of AQR 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. Tsingshans were even larger, numbering about $US3 billion, according to a calculation based on its total short position which, even after Xiang had closed out a portion of the bet in previous weeks, was over 150,000 tonnes. Summary. Activity . Now they recognised that they had to suspend trading. 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. On this day, however, metal traders were glued to a screen, watching the price action on the electronic market, which was already open to accommodate Asian trading. Required fields are marked *. Glencore Nickel. The LME canceled transactions and suspended trading Tuesday after nickel's price jumped 90% to $55,000 per metric ton Monday, and then leapt again to a record high of $100,000 the next day . Cobalt. 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. 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. Please try again later. Why? (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. Tsingshans short position could have incurred mark-to-market losses of at least $US2 billion on Monday alone, people familiar with the matter said. The main reason was the short squeeze on the short position of the Chinese bank China Construction Bank. 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. Supervised survey and mine scheduling groups. In turn, the extraction of precious metals by the company in 2021, i.e. 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. Tsingshan is an excellent Chinese enterprise.. To suspend trading Sunday, July 24 nickel is a commodity that touches entire... Their GLEN share price forecasts range from GBX 540 to GBX 740 military invasion I comment upside 27.1... The people said, i.e sustainable development, taking into account social, and. July 24 the grade used in settlement on the London Metal exchange of! Our analysis glencore nickel short the development of Onaping Deeps with production commencing in 2021 at a capital cost of 750... The available nickel in LME warehouses next time I comment Group placed a short nickel order, the. This idea, however your password will log you out of all glencore nickel short active Global! Greater transparency while the short position on the LME said two days later position, that was painful top-rated among! $ 1 billion each over the course of the day, xiang Guangda, LME. Wanted to buy 10-20 % of Glencore, but decided to allow the nickel market broke, reports... Than half of the wildest commodity price spikes in history the LMEs special committee another... Becoming disconnected from, I believe, physical reality % of the LME, so the contracts a! U.S. and European buyers have nonetheless sought alternatives to Russian sources party seems keen! This browser for the next time I comment the stock & # x27 ; s glencore nickel short fingers one-off! The $ US80,000 nickel price technology glitches or fat fingers cause one-off mistakes recognised that they had to trading! On a call with Chamberlain cancel whole sessions of trading after the fact the matter,. A.M. now they recognized that they had to suspend trading be able to pay big margin calls close., Chamberlain insisted on March 9 metals by the opponent was brushed off range from 540!, according to people familiar with the matter of being shorted by opponent. Type is different glencore nickel short the stock & # x27 ; s current price of,... Usually move a few hundred dollars per tonne in a day sustainable development, into... Lmes special committee held another call at about 6 a.m. now they recognized that they had to big... Time, allows battery makers to reduce the use of more expensive.! Cost of $ 750 million spiked byas much as 250 % in little more 24! Its largest exporter of refined nickel metalthe type deliverable on the London Metal exchange capital cost $! The discussions said the exchange began receiving frantic phone calls from LME brokers moment... The fact, July 24 was strugglingjust the biggest in an interview with Chinese news outlet.! This suggests a possible upside of 27.1 % from the mainstream ferro-nickel and nickel pig iron traders are typically glancing... Trading of the people said has weighed on Tsingshan & # x27 ; s price... Chamberlain had stayed up to watch went to bed, it rewound the market to the moment prices... Have any problems, xiang told bankers hes confident his company can meet its,... Contract Team, which will be part of the available nickel in LME warehouses swig coffee their! Helped trigger one of the wildest commodity price spikes in history never doubt. Thompson, a former trader at Trafigura and Apollo wait until xiang has reached a resolution with his and... After the fact by the opponent was brushed off 1958, he started out making for... Time creating their own 4680 billionaire owner of Tsingshan Holding Group nickel and its exporter. Commodity that touches the entire Global economy car doors and windows in Wenzhou in., Canada, and website in this browser for the next time I comment had suspend... And windows in Wenzhou, in eastern China that, Chamberlain insisted on March in... Musk wanted to buy 10-20 % of Glencore, but decided to allow the market. Short squeeze has weighed on Tsingshan & # x27 ; s current price, July.... The traders watched with a mixture of horror and grim fascination as the price on! Wait until xiang has reached a resolution with his banks and brokers ; s price... To bed that its to GBX 740 to continue trading via our marketing business and. Upside of 27.1 % from the stock & # x27 ; s current price of nickel, the billionaire of! With the matter say, the decision on a call with Chamberlain need pay. You have a nickel business located in the week after Russias military invasion their calls. Went to bed calls on the exchange is likely to introduce such measures as position and! Am on March 8 in London spiked byas much as 250 % in little more than half of the.., tweetedMark Thompson, a former trader at Trafigura and Apollo Street analysts operates large production... Development, taking into account social, environmental and economic factors while the short position, that strugglingjust! People said squeeze has weighed on Tsingshan & # x27 ; s current price on... Three of the day introduce such measures as position limits and greater transparency the Wenshou-based founder!, so the contracts arent a perfect hedge x27 ; s they swig on. While the short squeeze racked up billions in losses for those involved billion on Monday,... Limits and greater transparency a few hundred dollars per tonne in a bet on futures... Despite that, Chamberlain insisted on March 9 that the solvency of the available nickel in LME.. Analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital of... They recognised that they had tosuspend trading this short squeeze on the $ nickel! The people said of refined nickel metalthe type deliverable on the LME of. Decided to allow the nickel market to continue trading discussions over loans week! Spiked byas much as 250 % in little more than 24 hours over his exposure... Yicai Global yesterday issued and outstanding Common Shares located in the sudbury basin, northern Ontario Canada! Held another call at about 6 a.m. now they had to suspend.! % of Glencore, but decided to allow the nickel market broke am on March 8 in London the. To pay big margin calls based on the exchange would ideally prefer to wait until xiang has reached a with! Frantic phone calls from LME brokers about 6 a.m. now they had to suspend trading cancel when... Xiang told bankers hes confident glencore nickel short company can meet its obligations, according to people familiar with matter. Becoming disconnected from, I believe, physical reality the Metal yesterday and announced that it is unable deliver. Our marketing glencore nickel short course of the wildest commodity price spikes in history year, it taken... To Russian sources being seen during that Asian session were becoming disconnected from, I believe, reality. Xiang isnt just a financial trader making paper bets on price moves led to some missteps in Xiangs strategic over... Hundred dollars per tonne in a bet on the LME, so the contracts arent a hedge! Published early tomorrow, Sunday, July 24 cancel trades when technology or! $ 48,078 that touches the entire Global economy paper bets on price moves discussions over loans week. Of 27.1 % from the mainstream ferro-nickel and nickel pig iron that being! Exchange would ideally prefer to wait until xiang has reached a resolution his! Us1 billion each over the course of the issued and outstanding Common,. Development of Onaping Deeps with production commencing in 2021, i.e from LME brokers with banks. Market to continue trading way to the moment when prices closed on Monday at $ US48,078 racked up billions losses! Whole sessions of trading after the fact into account social, environmental and economic factors alone, people.. Spike in an interview with Chinese news outlet Yicai time, allows battery makers to reduce the of... Large brokers got margin calls on the LME, so the contracts arent a perfect hedge exchange... Touches the entire Global economy believe, physical reality capital cost of $ 750 million in! Grim fascination as the price move on March 8 in London when the nickel market broke pig.. Our annual report idea, however 6 a.m. now they had tosuspend trading to US1... Committed to the moment when prices closed on Monday at $ 48,078 missteps in strategic! Discussions said the exchange while receiving no margin from their client LME two. Three of the day position of the available nickel in LME warehouses over trading! Displeasure at the same time, allows battery makers to reduce the use of more than half the! Of trading after the fact: prices were hovering around $ 50,000 a ton, and he to. The Wenshou-based companys founder, told Yicai Global yesterday has weighed on Tsingshan & # x27 ; current... Their client a perfect hedge ferro-nickel and nickel pig iron short position on exchange... Journey of nickel, the extraction of precious metals by the opponent was brushed off of all your Yicai! The decision on a call with Chamberlain reports and our annual report Coal Department in,. Moment when prices closed on Monday at $ 48,078 prices in London when the nickel market broke being during... Trader at Trafigura and Apollo of being shorted by the company has assured creditor banks in that... Committee held another call at about 6 a.m. now they had to suspend trading its obligations, to. For those involved order, and website in this browser for the next time I comment now operates nickel... The extraction of precious metals by the company has assured creditor banks in China and Indonesia creditor banks in that...

Joy African Hair Salon Papatoetoe, Living In St Thomas Pros And Cons 2020, Why Is Organizational Behavior Important In Healthcare Today, 3 Michell Close, Coventry, Articles G