Already at an all-time high by 5.42am, it lurched higher in leaps, soaring $US30,000 in a matter of minutes. 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. View analysts price targets for GLEN or view top-rated stocks among Wall Street analysts. 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. 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. It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle. Feb 2021 - Dec 202111 months. The LME made a near-unprecedented decision. Our marketing business markets nickel and nickel concentrates, as well as by-products and ferronickel. Then came a geopolitical crisis that caught him unawares. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Si estn subiendo los predios de los metales y dedcuieto nuevas forulasparavas frmulas paraformar y tranformar los metales megustaria encontrar una empresa ,organizacin,para si le interereza ase un tratado denegosiar un trato demostraciones y prbarles yensearleslo que estudie transformaciones aliaciones dijitales y la fabricacionde. 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. Project manager for transition of Sudbury INO from CAMP to Deswik. 21 962. Xiang Guangda, the billionaire owner of Tsingshan Holding Group. Mark Hansen, chief executive officer of Concord Resources, Help using this website - Accessibility statement. Save my name, email, and website in this browser for the next time I comment. Tsingshan Holding Group was looking at an $8 billion trading loss after nickel prices soared, The Wall Street Journal reported Tuesday . A Glencore spokesman declined to comment. But its obligations dwarfed its available cash and bank credit. LME brokers and their clients were hit with margin call after margin call. We produce other metals as a by-product of nickel production, including cobalt, copper, precious metals and platinum-group metals. Company says it puts it into the league of the largest undeveloped nickel deposits in the world. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. Baar, Zug, Switzerland. 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 two major mining companies in Sudbury are working together to . It was 5:42 a.m. on March 8 in London when the nickel market broke. Poseidon Nickel stock opened the day at A$0.04 after a previous close of A$0.04. Executives fromGoldman Sachs Group Inc.voiced their displeasure at the decision on a call with Chamberlain. Xiang didnt believe the rally would last. Everything changed when Russia invaded Ukraine. This suggests a possible upside of 27.1% from the stock's current price. Neither party seems very keen on this idea, however. Its not just a casino.. Copper. Shanghai's most-traded nickel futures contract . 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. The company paid at least some of its margin calls early on March 7, says one person familiar with the matter. Xiang isnt just a financial trader making paper bets on price moves. Please try again later. Yet the day before, the market had started to unravel . 6 kt/a nickel in concentrate). Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. 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. (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. 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. We produce some of the worlds purest nickel. 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. Like Comment Share. Canada Nickel Company Inc. $1.24. By now, the entire nickel industry was in crisis. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. Nickels 250 per cent price spike in little more than 24 hours plunged the industry into chaos, triggering billions of dollars in losses for traders who bet the wrong way and leading the London Metal Exchange (LME) to suspend trading for the first time in three decades. 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. In discussions over loans this week, Xiang told bankers hes confident his company can meet its obligations, according to people familiar. In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. 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. Earlier this week, nickel prices in London spiked by as much as 250 per cent in little more than 24 hours. 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 . We're taking you for a deep dive into the world of copper - a versatile metal and important component for a low-carbon future. Complete Glencore PLC ADR stock information by Barron's. View real-time GLNCY stock price and news, along with industry-best analysis. 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. All prices are listed in Australian Dollars. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . At current prices, nickel would comprise 12% of Glencore's EBITDA. Share. Mar 16, 2022 - 8.00am. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee . 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 A market that many veterans simply describe as "broken." It's been three weeks since nickel was suspended on the London Metal Exchange after a . If you don't see the email, check your junk, spam or other folders. Report summary. 1. The Chinese government may also play a role. Stephen Engle reports. 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. Were working to restore it. 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. 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. UNFORGIVABLE, tweeted Mark Thompson, a former trader at Trafigura and Apollo. . 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. . Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. 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 . The investment is part of Ruperts non-brokered private placement for gross proceeds of about $35 million. 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. (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. Crucially, the decision meant traders wouldnt need to pay margin calls based on the $US80,000 nickel price. Trading and mining giant Glencore was the dominant holder of nickel in recent months, according to people familiar with the matter. gold and silver, amounted to 809 and 31 516 tons, respectively. Explore the extraordinary journey of nickel, of nickel sold via our marketing business. Massive short positions held by Xiangs Tsingshan Holding Group Co., the worlds largest nickel producer, have gone disastrously awry over the past few days. I see all automakers within a short time creating their own 4680 . Xiangs short position has now racked upbillions of dollars in losses. Sr. Exploration Geologist CMDIC Collahuasi 2006 - 2007 1 year. 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. Tsingshan didnt respond to multiple requests for comment, and Xiang couldnt be independently reached. . The show will focus on global macro issues with a middle eastern context, provide expert analysis of major market moving stories and speak with the biggest newsmakers in the region. 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. Get in touch with us now. 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. Nickel in electric vehicle batteries helps deliver higher energy density and longer range for vehicles. MMC Norilsk Nickel Recent Development 11.3 Glencore 11.3.1 Glencore Company Detail 11.3.2 Glencore Business Overview 11.3.3 Glencore Nickel Mining . Sulphuric acid. Glencore UK Ltd, Izimbiwa Coal (Pty) Ltd, Katanga Mining Limited, Kazzinc Ltd., Koniambo Nickel S.A.S., Magdeburg, Mangoola Coal Operations Pty Limited, McArthur River Mining Pty Ltd, Minera . As at January 31, 2023 Glencore holds 72,008,404 Common Shares, representing approximately 70.8% of the issued and outstanding Common Shares. Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. Glencore's original trading business is still a powerhouse and is . 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 seeds of the epic short squeeze were sown last year, when nickel, like all commodities, was rallying from its Covid-era low. 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. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. Glencore's Koniambo mine is located in New Caledonia, mining nickel in this French territory in the South Pacific. All Rights Reserved. The discussions are ongoing, and its not clear what stance Tsingshans banks, which include JPMorgan Chase & Co. and China Construction Bank Corp., will take. However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . The LME at the end of the day is a physical metal market, he says. While Russias nickel exports havent been targeted by sanctions, US and European buyers have nonetheless sought alternatives to Russian sources. Soon Chamberlain and other executives at the exchange began receiving frantic phone calls from LME brokers. The LME is now very likely going to die a slow, self-inflicted death through the loss of confidence in it and its products, predicted Thompson in a tweet. The Chinese government may also play a role. Our fundamental responsibility is market stability, he said. 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. A year after the short squeeze that brought the LME to the brink of collapse, the nickel market remains barely functional, with trading volumes sharply lower and prices regularly experiencing wild . Four or five of the brokerages that are LME members would have failed, a shock that could have devastated the global metals industry. MT. It now operates large nickel production facilities in China and Indonesia. 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. Some market rumors are circulating that Glencore might squeeze Tsingshan on LME Nickel for its 60% stake in a nickel mine in Indonesia. Tsingshans nickel doesnt match the grade used in settlement on the LME, so the contracts arent a perfect hedge. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($56 billion) last year, paid its margin calls on time. 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. Coal Department. 389 8 Comments. For the LME, the future isunclear. Tsingshan is an excellent Chinese enterprise.. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. But the obvious consequence of so much nickel hitting the market, he believed, would be a fall in its price. When it was flying towards $US100,000, you could feel the damage, and you knew companies were fighting for their existence, says John Browning, founding partner of brokerage Bands Financial and a former LME board member. Activity . 92 000 MT. 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. You have achieved great things in these short 4 years (whilst remaining humble and kind); I am super Congratulations and thank you Aurlien Bouic! 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. INF News.com. Vale is the world's largest producer of nickel, one of the most versatile metals in existence. 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. 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. Some aggrieved traders are already preparing to take legal action against the exchange. UNFORGIVEABLE,tweetedMark Thompson, a former trader at Trafigura and Apollo. In theory, there should be two options for this 200,000 tons of nickel short order: 1. (Podcast). But while the short squeeze has weighed on Tsingshans short-term cash flows, strong nickel prices are to its advantage in the long run. 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. Nickel is a raw material that is characterized by exceptional resistance and special properties, thanks to which it has many applications. 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. Even at that level, clients of LME brokers had failed to pay some $US500 million of margin calls in relation to their short positions on the exchange, says a person familiar with the matter. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metal the type deliverable on the LME. 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. But much of Chinas academic and business community did not believe Russia would attack its neighbour. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Others took to social media. Harjavalta nickel smelter in Finland (Credit: Boliden). For Xiangs big short position, that was painful. . Toronto, Ontario-- (Newsfile Corp. - March 1, 2023) - Mink Ventures Corporation. Those moves sent nickel to a record high of more than $US100,000 ($136,000) a tonne on Tuesday before trading was suspended. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. For most of the past decade, they'd traded between $10,000 and $20,000. Exchanges sometimes cancel trades when technology glitches or fat fingers cause one-off mistakes. On average, they predict the company's share price to reach GBX 620.91 in the next year. Those 18 minutes will haunt me, says the executive, who requested anonymity. 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. Learn how we produce copper and the uses it is put to. Russia is the worlds third-largest producer of nickel and its largest exporter of refined nickel metalthe type deliverable on the LME. Why bet against nickel when you have a nickel business? LMEs Chamberlain defended cancelling the trades. Others in the market may also push up prices in anticipation of that short covering. Some hedge funds were buying nickel contracts in a bet on the electric vehicle boom. Follow the topics, people and companies that matter to you. They held a hurried call on Monday evening, but decided to allow the nickel market to continue trading. Overseas market players have made some moves, Xiang said, driving up nickel prices in the last two days. 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. Tsingshan is in touch with relevant parties and has the support of Chinese government departments and leaders, he added. Murrin Murrin is a nickel-cobalt operation in the north-eastern Goldfields of Western Australia, producing refined nickel and cobalt metal. 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. Glencore Nikkelverk is an important part of the green shift. Xiang was aware of flaws in his strategy, people familiar with the matter said. 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. . . Perth, Western Australia, Australia. At the time of the LME's trading halt, nickel had gained more than 230% in March. The LME made a near-unprecedented decision. 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. Miners, traders, and manufacturers often use the market to make short betsthat is, to make money when prices fall. Several large brokers got margin calls of close to $US1 billion each over the course of the day. The operations also include the Sudbury smelter. Tsingshans short position could have incurred mark-to-market losses of at least $2 billion on Monday alone, people familiar with the matter said. Its not clear to what extent Xiang saw his position as merely a hedge or as a speculative bet. 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 . Xiang isnt just a financial trader making paper bets on price moves. (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.). Then came a geopolitical crisis that caught him unawares. At current prices, nickel would comprise 12% of Glencore's earnings before interest, tax, depreciation and amortisation (EBITDA) as well as 9% EBITDA for Anglo American and BHP, also listed in Johannesburg. Stainless steel with nickel content is omnipresent, for example in buildings, bridges and kitchen appliances. Yet the firm's lucrative . For a while, it was unclear which view of the market would prevail. Glencore Headquarters. That put Tsingshans banks and brokers, which includeJPMorgan Chase,BNP Paribas, andStandard Chartered,in a bind. Tsingshan needs to increase the contract margins or roll over the futures if it decides to keep the contracts, which would require a huge amount of cash, an analyst told Yicai Global. That put Tsingshans banks and brokers, which include JPMorgan Chase, BNP Paribas, and Standard Chartered, in a bind. The production of Glencore Nikkelverk in 2019. Xiang Guangdas wrong-way bet on nickel futures helped trigger one of the wildest commodity price spikes in history. The paper loss stood at $8 billion on Monday, before violent moves in nickel prices led the London Metal Exchange to suspend trading in the metal on Tuesday, one of the people said. (By Jack Farchy, Alfred Cang and Mark Burton, with assistance from Sridhar Natarajan), Your email address will not be published. Effectively, it rewound the market to the moment when prices closed on Monday at $48,078. 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. By now, Tsingshan wasnt the only nickel company that was strugglingjust the biggest. 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. Glencore. And once again, this short squeeze racked up billions in losses for those involved. While few observers believed Xiang could reach that level of production, he was confident. Resetting your password will log you out of all your active Yicai Global sessions. Now they recognised that they had to suspend trading. Hes in the physical nickel business. 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. The LMEs special committee held another call at about 6am. #GlencoreCopper #MetalOfTheFuture https://lnkd.in/eEqPmJn9. For most of the past decade, theyd traded between $10,000 and $20,000. It decided to cancel all the trades that took place on Tuesday morning some $US3.9 billion of them. People forgot that this isnt a video game retailer; its an important physical commodity. 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. Among them were some of the biggest names on Wall Street. Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. Bloomberg Daybreak Middle East. 39 000 MT. 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