glencore nickel short

The nickel market was anything but calm. . It decided to cancel all the trades that took place on Tuesday morning$3.9 billion of them, according to a Bloomberg calculation. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. Finance > Capital-markets. 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. Bloomberg. 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. Glencore. 389 8 Comments. 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. Tsingshan accounted for about half that amount. Golf's Greatest Holes: Golfing legend Paul McGinley takes television presenter Chris Hollins on a tour of the best golf courses in Ireland and Northern Ireland. Certain sections of this system have been patented. LMEs Chamberlain defended cancelling the trades. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. Like Comment Share. 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. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. Matthew Chamberlain, the LMEs chief executive officer, had stayed up to watch. Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. Glencore-backed Leeuwin ready to set sail. We produce other metals as a by-product of nickel production, including cobalt, copper, precious metals and platinum-group metals. He draws a comparison with Silver Thursday, the day in 1980 when an attempt by the Hunt brothers to corner the silver market came unstuck. 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. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. In terms of revenue, the global largest two companies occupy a share . People forgot that this isnt a video game retailer; its an important physical commodity.. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. 2017 - 2018 Yicai Global, Yicai Media Group. Glencore's original trading business is still a powerhouse and is . Xiang Guangda, the billionaire owner of Tsingshan Holding Group. And once again, this short squeeze racked up billions in losses for those involved. 1w. LME brokers and their clients were hit with margin call after margin call. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. Trafigura Lines Up Russia Aluminum Deal in Challenge to Glencore. Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. 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While few observers believed Xiang could reach that level of production, he was confident. 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. Despite the recent upheaval, his company still remains the biggest in the nickel industry. Investors who had booked trades during the chaotic session in the early hours of Tuesday were furious. Nickel prices had been rising for weeks, amid fears that supplies from Russia the largest exporter of refined nickel would be disrupted if the country invaded Ukraine. . 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. LME chief executive Matthew Chamberlain had stayed up to watch. The fallout was immediate. How Xiang got to this point is a story that encompasses Chinas emergence as a global economic behemoth. (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.). 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. This matters beyond the cozy world of . Cash and short-term investments. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. Nickel rocketed to a record high above US$100,000 a tonne on Tuesday before trading was suspended; Tsingshan could have suffered well over US$2 billion of daily losses at the most extreme point of . Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. We produce some of the world's purest nickel. . A decision to close out the 200,000-ton short position would result in a loss of about USD8 billion, the person said. Feb 2021 - Dec 202111 months. 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. Live from Dubai, connecting Asian markets to the European opens. #GlencoreCopper #MetalOfTheFuture https://lnkd.in/eEqPmJn9. Others in the market may also push up prices in anticipation of that short covering. As Russias invasion of Ukraine pushed up prices, short-position holders including Tsingshan scrambled to trimtheir bets. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. Report summary. Xiang wanted to increase Tsingshans production dramatically by producing so-called nickel matte for electric vehicle batteries. 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. (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.). Glencore Headquarters. At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. Some started hurrying to buy back nickel contracts, sending the price of nickel spiraling ever higher. The company paid at least some of its margin calls early on Monday, according to a person familiar with the matter. Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. 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. Source: LME. 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. Anglo, which produced 59.3 million tonnes of iron ore last year, aims to halve its Scope 3 indirect emissions by 2040. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. Miners, traders, and manufacturers often use the market to make short bets that is, to make money when prices fall. 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. 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. 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 . At 1am on March 8, the market opened. Discovery of the deposits is credited to Murray Edmund Watts in 1931 or 1932. For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Nickel makes steel corrosion-resistant and plays an essential role in our modern world. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. Canada Nickel Company Inc. $1.24. For participants in commodities exchanges, a price rally is not necessarily good news. Nickel prices, however, has been moving in an uptrend for a long time. However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . In late February and early March, Tsingshan, which had sales of 352 billion yuan ($56 billion) last year, paid its margin calls on time. A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after this weeks unprecedented price spike, according to people familiar with the matter. 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. Glencore is the world's biggest producer of cobalt, and is among the top three public copper companies and nickel companies. 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. 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. 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 . As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. 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. Nickel. Shanghai's most-traded nickel futures contract . Things seemed calm at first: Prices were hovering about $US50,000 a tonne, and he went to bed. 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 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. Your email address will not be published. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. articles a month for anyone to read, even non-subscribers! Short Interest; Premarket Screener . Enter the code below to reset your password. 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. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. The company has a diversified basket of commodities, including nickel, which is famous because of electric vehicles. 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. Raglan Mine is a nickel-copper operation located in the Arctic region at the extreme limit of northern Quebec. While Russias nickel exports havent been targeted by sanctions, US and European buyers have nonetheless sought alternatives to Russian sources. 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. Lines up Russia Aluminum Deal in Challenge to glencore brokers, and often. 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