glencore nickel short

Xiang was aware of flaws in his strategy, people familiar with the matter said. The Chinese government may also play a role. For most of the past decade, theyd traded between $10,000 and $20,000. Those past scandals forced reforms on the exchange. UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. Xiang wanted to increase Tsingshans production dramatically by producing so-called nickel matte for electric vehicle batteries. Nickelcopper ores have been mined there since 1928. (Bloomberg) -- A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after the metal surged more than 170% in two days, according to people familiar with the matter. For the LME to cancel nickel trades between willing buyers and sellers is unforgivable. this week's short squeeze is nonetheless likely to push . #GlencoreCopper #MetalOfTheFuture https://lnkd.in/eEqPmJn9. Our fundamental responsibility is market stability, he told Bloomberg TV. Hes in the physical nickel business. In cobalt, a Chinese state-owned firm is also quite large, but Glencore is still the largest producer of cobalt in the free world. Qingshan Holding Group,Nickel,Futures Contract, Paris Looms as Europe's Largest Financial Market, French Economy Minister Says, Alibaba, Spain's El Corte Ingles Department Store Ally on Digital Retail, China's GEM to Supply 100,000 Tons of Lithium Battery Materials to Korea's Ecopro, Toshiba Home Appliances Returns to Profit After Midea Takeover, Chairman Says, How AR is Poised to Change Business Forever. Xstrata Nickel Montcalm Mine 2007 - 2010 3 years. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . Glencore will give almost 6bn to shareholders after the mining and commodities company reported record pre-tax profits of more than 28bn in 2022 . articles a month for anyone to read, even non-subscribers! Copper. Chinese entrepreneur Xiang Guangda has been caught out by nickels price surge. 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 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. 39 000 MT. Our nickel operations are in Canada, Australia, Norway, and New . Some started hurrying to buy back nickel contracts, sending the price of nickel spiraling ever higher. 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. Iquique Chile Falconbridge . 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. Stephen Engle reports. Shanghai's most-traded nickel futures contract . Investors who had booked trades during the chaotic session in the early hours of Tuesdaywere furious. In this position, you will be responsible for the drafting of sales and purchase contracts and related legal documents. Were working to restore it. Glencore Chief Executive Officer, Gary Nagle: "Overall production was mixed period-over-period (5 commodities up and 5 down in the table below), reflecting the Ernest Henry (copper/gold) and Bolivia (zinc) portfolio disposals, and geotechnical and processing challenges at Katanga, offset by improved cobalt, nickel and ferrochrome production levels and the . The world's top five nickel-producing companies. 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. 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. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. Glencore is still a short opportunity but mid-2022 looks to be the end of long run commodity bear trend. It can produce 1.8 million tons of nickel alloy and its mine in Indonesia has an annual capacity of over 3.5 million tons. Born in 1958, Xiang founded his business more than 30 years ago as a workshop making frames for car doors and windows in Wenzhou, eastern China. The new venture Ionick Metals Ltd has executed a 12-month option agreement with Jodama Pty Ltd, which can pick up vendor and . They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. 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. This matters beyond the cozy world of . I'll discuss why. Strong passwords include numbers,letters,and special characters. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. On average, they predict the company's share price to reach GBX 620.91 in the next year. 485,996 followers. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee . The company has a diversified basket of commodities, including nickel, which is famous because of electric vehicles. 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. Resetting your password will log you out of all your active Yicai Global sessions. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office. How to Geta Free Flight to Hong Kong in 500,000 Airline Ticket Giveaway, Stocks Drop for a Second Day; Yields Stay Elevated: Markets Wrap, The SPAC Fad Is Ending in a Pile of Bankruptcies and Fire Sales, Apple Suppliers Are Racing to Exit China, AirPods Maker Says, China Warns Hedonistic Bankers to Toe the Communist Party Line. Coal Department. The fallout was immediate. Evaporating liquidity. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. People forgot that this isnt a video game retailer; its an important physical commodity.. He started increasing his short position on the London Metal Exchange. There are also traders making plans to abandon the LME nickel contract, a move that would reduce market liquidity, making it harder for everyone from miners to car companies to manage their exposure to prices and access financing. Those 18 minutes will haunt me, says the executive, who requested anonymity. Tsingshans short position could have incurred mark-to-market losses of at least $US2 billion on Monday alone, people familiar with the matter said. Nickels price moved sharply higher in the week after Russias military invasion. Nickel makes steel corrosion-resistant and plays an essential role in our modern world. 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. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. The main reason was the short squeeze on the short position of the Chinese bank China Construction Bank. Sulphuric acid. 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. Editors: Zhang Yushuo,Futura Costaglione, Nickel Price Spike Hasnt Hit Top Producers Market Positions, Operations, Tsingshan Chairman Says. 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. Nickel prices surged to an all-time high on Tuesday, up roughly 250% in just two days, and forcing the London Metal Exchange to close trading. Xiang isnt just a financial trader making paper bets on price moves. Yet the day before, the market had started to unravel, with prices rising by astunning66% to $48,078. China's manufacturing activity expanded at the fastest pace in more than a decade in February. Despite the recent upheaval, his company still remains the biggest in the nickel industry. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. 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. Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. The price was frozen, below the record high but still at $80,000 a ton. China's manufacturing purchasing managers' index (PMI) climbed to 52.6 last month, the highest reading since April 2012. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. The investment is part of Ruperts non-brokered private placement for gross proceeds of about $35 million. Their GLEN share price forecasts range from GBX 540 to GBX 740. For participants in commodities exchanges, a price rally is not necessarily good news. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. Supervised survey and mine scheduling groups. The LME made a near-unprecedented decision. The fallout was immediate. 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. (Podcast). However, Xiang believed the risks to be manageable, the people said, even as an unidentified nickel stockpiler controlled at least half of the inventories on the exchange. 4 354 . Explore the latest reports and results, including financial results, production reports and our annual report. Glencore Nickel. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. The nickel market was anything but calm. 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. Bloomberg Daybreak Middle East. Then on March 7, nickels price began its parabolic ascent, surging from $30,000 a ton to more than $50,000. 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 discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank, will take. Baar, Switzerland 29 July 2022. . Miners, traders, and manufacturers often use the market to make short bets that is, to make money when prices fall. The price was frozen, below the record high but still at $US80,000 a tonne. Tsingshan Group placed a short nickel order, and the matter of being shorted by the opponent was brushed off. There are also traders making plans to abandon the LME nickel contract, a move that would reduce market liquidity, making it harder for everyone from miners to car companies to manage their exposure to prices and access financing. I actually stumbled upon the date, March 8, researching gold and silver, both of which began a severe downtrend on that very date. Remember, when prices move up, traders like Xiang who have sold futures contracts face margin calls; they must put up more cash to cover potential losses. UNFORGIVEABLE,tweetedMark Thompson, a former trader at Trafigura and Apollo. Share. Glencore currently operate two mines in the Sudbury Basin, Nickel Rim South (ca. 6 kt/a nickel in concentrate). Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. 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. From a contractual perspective, you may be . 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. Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore. 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. For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. Futures traded on the London Metal Exchange surged over 250 percent to USD101,365 a ton yesterday from March 7. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. 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. 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. Canada Nickel Company Inc. $1.24. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. 92 132 MT. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. Chinese tycoon behind nickels big short has power to fuel more drama. The price move on March 8 created a systemic risk to the market, the LME said two days later. 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. 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. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. Nickel is a raw material that is characterized by exceptional resistance and special properties, thanks to which it has many applications. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. 2W - 6W. 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. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. Xiangs short position has now racked up billions of dollars in losses. Those past scandals forced reforms on the exchange. Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. This type is different from the mainstream ferro-nickel and nickel pig iron. Nickel. Feb 2021 - Dec 202111 months. We had a frenzy based on speculation that accelerated on Monday and Tuesday. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. 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. Major international companies like BHP Group Ltd. and Rio Tinto Plc hedge against currencies, commodity prices and interest rates on an as required basis. 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. 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. Why bet against nickel when you have a nickel business? (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. Our analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital cost of $750 million. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. 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. 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. Everything changed when Russia invaded Ukraine on February 24. LME brokers and their clients were hit with margin call after margin call. Those moves sent nickel to a record high of more than $100,000 a ton on Tuesday beforetrading was suspended. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Senior Mine Engineer. . The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. Late Tuesday . Nickel prices usually move a few hundred dollars per ton in a day. 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 Mark-To-Market losses of at least $ US2 Billion on Monday evening, but decided to allow nickel... To allow the nickel market to make short bets that is, to make money prices... Log you out of all your active Yicai Global sessions fundamental responsibility market. Operate two mines in the Sudbury Basin, nickel price Spike Hasnt Hit Producers. Read, even non-subscribers, so the contracts arent a perfect hedge with prices rising by %! On their way to the market to make money when prices fall largest exporter of refined Metal! Move on March 8 created a systemic risk to the market, he believed, would be a fall its. 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