However, Xiang believed the risks to be manageable, the people said, even as anunidentified nickel stockpilercontrolled at least half of the inventories on the exchange. It is owned and operated by Glencore Canada Corporation.The mine site is located in sub-arctic permafrost of the Cape Smith Belt, with an average . 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. Located in Kristiansand, Nikkelverk is the largest nickel refinery in the western world producing high-quality nickel and cobalt. 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. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. The LMEs special committee held another call at about 6am. China's manufacturing purchasing managers' index (PMI) climbed to 52.6 last month, the highest reading since April 2012. 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. 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. Long Term . (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.). But much of Chinas academic and business community did not believeRussia would attackits neighbor. Tsingshan is an excellent Chinese enterprise.. Xiang isnt just a financial trader making paper bets on price moves. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. He was awakened by a phone call at 5.30am. Its unclear whether he will get his way. Report summary. 2023 Glacier Media Group, All Rights Reserved. Chinese tycoon behind nickels big short has power to fuel more drama. While few observers believed Xiang could reach that level of production, he was confident. 6 kt/a nickel in concentrate). 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 Nikkelverk AS has a modern and complex processing system. . Short Interest; Premarket Screener . Iquique Chile Falconbridge . Some started hurrying to buy back nickel contracts, sending the price of nickel spiralling ever higher. Glencore plc was newly . It traded briefly above $100,000 a ton early on Tuesday. 389 8 Comments. 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. What does Tsingshan Group's rival, Glencore, do? Sign up to get it every weekday morning. Wayne has over 20 years of operational management experience of complex hydrometallurgical plants, specialising in transformation of operational and . In the short term, apackage of loansfrom Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. 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. People familiar with the discussions said the exchange would ideally prefer to wait until Xiang has reached a resolution with his banks and brokers. Nickel prices usually move a few hundred dollars per ton in a day. Glencore. But much of Chinas academic and business community did not believe Russia would attack its neighbour. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. Hes in the physical nickel business. Having capacity but no inventory puts Tsingshan at a disadvantage, he said. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. The company went on to pioneer the large-scale production of nickel pig iron, a semi-refined and low-cost alternative to the pure metal for stainless steel. 2023 Glacier Media Group, All Rights Reserved. But while the short squeeze has weighed on Tsingshan's . Our fundamental responsibility is market stability, he said. Mark Hansen, chief executive officer of Concord Resources. Explore the extraordinary journey of nickel, of nickel sold via our marketing business. . Our analysis assumes the development of Onaping Deeps with production commencing in 2021 at a capital cost of $750 million. Nickel prices usually move a few hundred dollars per ton in a day. . 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. At the time of the LME's trading halt, nickel had gained more than 230% in March. Baar, Zug, Switzerland. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. 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. 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. Xiang was aware of flaws in his strategy, people familiar with the matter said. Glencore Nickel. Hes in the physical nickel business. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. 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. Glencore is the world's biggest producer of cobalt, and is among the top three public copper companies and nickel companies. Yet the firm's lucrative . 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. Anglo, which produced 59.3 million tonnes of iron ore last year, aims to halve its Scope 3 indirect emissions by 2040. Already at an all-time high by 5:42 a.m., it lurched higher in stomach-churning leaps, soaring $30,000 in a matter of minutes. In discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. Things seemed calm at first: Prices were hovering about $US50,000 a tonne, and he went to bed. 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. In this position, you will be responsible for the drafting of sales and purchase contracts and related legal documents. As the trend towards e-mobility grows, this versatile metal is increasingly needed to produce high-performance batteries. 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. Find the latest Glencore plc (GLNCY) stock quote, history, news and other vital information to help you with your stock trading and investing. 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. 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. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($56 billion) last year, paid its margin calls on time. They include: Koniambo is a large-scale integrated ferronickel mining and processing complex. For participants in commodities exchanges, a price rally is not necessarily good news. 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. Not everyone shared his pessimism about prices. The price was frozen, below the record high but still at $US80,000 a tonne. Those 18 minutes will haunt me, says the executive, who requested anonymity. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. Neither party seems very keen on this idea, however. Tsingshan mostlymakesstainless steelthat isused inthepetroleum, chemicals, auto,and other fields. 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. Feb 2021 - Dec 202111 months. 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. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. 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 . 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. 39 000 MT. Others took to social media. Stephen Engle reports. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. Nickel is mainly used in the production of stainless steel because it improves its strength and resistance to corrosion. 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. The price move on March 8 created a systemic risk to the market, the LME said two days later. Glencore is a leading producer and marketer of nickel, as well as a recycler of nickel-containing materials such as batteries. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. 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. 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. Miners, traders, and manufacturers often use the market to make short bets that is, to make money when prices fall. He was awakened by a phone call at 5:30 a.m. . Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. Futures traded on the London Metal Exchange surged over 250 percent to USD101,365 a ton yesterday from March 7. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. Cobalt. At 1am on March 8, the market opened. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. Everything changed when Russia invaded Ukraine on February 24. Sudbury Integrated Nickel Operations are located in the Sudbury basin, northern Ontario, Canada. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. He blamed foreigners making some moves for nickels price spike in an interview with Chinese news outlet Yicai. 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. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. 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. 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. Were working to restore it. Xiang didnt believe the rally would last. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. The LME made a near-unprecedented decision. This type is different from the mainstream ferro-nickel and nickel pig iron. Glencore is still a short opportunity but mid-2022 looks to be the end of long run commodity bear trend. 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. Company says it puts it into the league of the largest undeveloped nickel deposits in the world. People forgot that this isnt a video game retailer; its an important physical commodity.. 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