tsingshan nickel margin call

The Wall Street Journal, which previously reported the talks, also said Standard Chartered (STAN.L) and BNP Paribas (BNPP.PA) were among the banks looking to reach agreement. Erin Jonasson. They had offset their deals with Tsingshan by placing their own short positions on the LME. Box N-4865, Nassau, Bahamas. our Subscriber Agreement and by copyright law. As with similar short squeezes of the past, such as those involving GameStop and Volkswagen, a short squeeze occurs when a market participant borrows a certain volume of a security and sells it, hoping that its price will fall. 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. Short-covering trades made last week by the Chinese billionaire contributed to a swift, huge surge. ", Britain's Financial Conduct Authority (FCA) and the Bank of England are talking to the London Metal Exchange about the resumption of a fair and orderly market in nickel, the FCA said on Monday in response to a request for comment. Its also one of the most important raw materials needed inmaking batteriesfor electric vehicles. Tsingshan was betting that nickel prices would slump but instead they staged an unprecedented rally amid severe economic sanctions against Russia, a major global producer of the metal, over its invasion of Ukraine. While Russias nickel exports havent been targeted by sanctions, U.S. and European buyers have nonetheless sought alternatives to Russian sources. Perhaps whats most surprising is that this nickel squeeze happened within a market that had, for the last few years, been comparatively sedate, with rangebound trading rarely breaking above the $20,000/metric tonne (mt) mark on the upside before 2022. FY18 RESULTS, FY19 GUIDANCE AND CORPORATE PRESENTATION 22 AUGUST 2018 AGENDA Results Guidance Corporate Operations Growth Exploration Nickel Market DISCLAIMER AND FORWARD The broker was able to settle the margin calls on Tuesday after several clients, including Tsingshan, got loans to cover their positions, one of the people said. Why? Most analysts sided with Xiang, at least in the medium term, believing that nickel productionled by Tsingshan and its competitors in Indonesiawould outpace demand. LME brokers and their clients were hit with margin call after margin call. This report studies the Ferronickel market, covering market size for segment by type (Ferronickel (Nickel15%), Ferronickel (Nickel15-25%), etc. Bloomberg: Balance of Power focuses on the politics and policies being shaped by the agenda of President Biden's administration. Nickel prices shot up as much as 250% in two days on the LME at the start of this week. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. China's Tsingshan Holding Group has reached agreements with two companies to swap its . The major market events for the week ahead right in your inbox. This will allow the trader to buy the security back at a lower price, return it to the lender and hopefully pocket a handsome profit. Capital Com Online Investments Ltd is a limited liability company with company number 209236B. Bloomberg: Balance of Power focuses on the politics and policiesbeing shaped by the agenda of President Biden's administration. You should never trade more than you can afford to lose. It granted extra time on March 7th to CCBI Global, a Chinese broker for Tsingshan that is a member of the LME, to raise funds from its state-owned parent, China Construction Bank, to cover. Comparable-store sales rose 19.3% in fiscal 2020 and grew another 14.4% year over year in the first nine months of 2021. We expect the EBITDA margin to be around . Chinese metal giant Tsingshan Holding Group Ltd., caught in a massive short squeeze amid an unprecedented rally in the price of nickel, reached a deal with banks to avoid further margin calls.. Tsingshan, one of the world's biggest nickel and stainless steel producers, worked out a standstill arrangement with a consortium of hedge bank creditors that will allow the company to continue . Following Russias invasion of Ukraine on 24 February, the three-month nickel contract rocketed to more than $100,000/tonne on 8 March, hitting an intra-day high at $101,365 on the same day. The difference between trading assets and CFDs. 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, Chamberlaininsisted to Bloomberg TVon March 9 that the solvency of the LME itself was never in doubt. Others took to social media. The Chinese government may also play a role. Help using this website - Accessibility statement. 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's difficulties paying its margin calls have put its . read more. For Xiangs big short position, that was painful. articles a month for anyone to read, even non-subscribers! (HNI) to produce higher-grade nickel matte. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. Pleased to report an extremely strong year for the Nickel Industries and the. Nickels price moved sharply higher in the week after Russias invasion. According to reports, Tsingshan Group plans to produce 850,000 tons of nickel in 2022, an increase of 40% compared with the production of nearly 600,000 tons in 2021. 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The limits also meant that those buyers seeking to unwind their positions had to join a long queue of sellers waiting to complete their transactions. But the LME has defended its actions, arguing that the decisions it took were made with full regard to regulatory due process and in the interests of the market as a whole, according to a spokesman for the exchange, who spoke to UK financial-news publication City A.M. during the week after the suspension. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Nickel trading resumed on 16 March 2022. On February 22, 2023, Yangjiang News, at the "New Track, Great Future--Qingshan S32001 Duplex Steel Channel Market Launch Conference" hosted by Qingyi Steel Plus, 60% off clearance with American Eagle promo code, Wayfair promo code: 10% off any single purchase, Kohl's promo code: 30% off for Kohl's Rewards Members, 50% off + free delivery on any order with DoorDash promo code. Tsingshan's were even larger, numbering roughly US$3 billion, according to a Bloomberg calculation based on the company's total short positionwhich, even after Xiang . If nickel prices stay lofty it could complicate the energy transition with electric vehicle batteries costing more to produce. Nickel prices trading on the London Metal Exchange (LME) has fallen significantly over the past few months as restrictions cooled the turbulent market, pulling the metal down from its record high of above $100,000 a tonne on 8 March. Brokers, in turn, must hold margin at the clearing house, LME Clear. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. And thank you everyone for your attendance on today's call for the Nickel Industries Full Year 2022 Results. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. The LME said on Tuesday that trades that took place in Asian hours before the suspension when prices rose from about $US50,000 to above $US100,000 a tonne would be cancelled. 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. Tsingshan agreed standstill with JPMorgan-led group of banks, Talks continue on loan facility to backstop short position. 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. The prices that were being seen during that Asian session were becoming disconnected from, I believe, physical reality.. Tsingshan's nickel matte plans could be 1st step into lithium battery value chain. Challenges Remain, But There Are Opportunities to Be Interview with Mr. Olukayode Pitan, Chief Executive Officer Unemployment in South Africa: Urgent Attention Required, The US-Africa Leaders Summit: Fostering a Closer Relationship with the Continent, Agenda BC#: Innovation and Inclusion in the Brazilian Financial System, Why Fertiliser Prices Have Been So Volatile This Year. Creditors and banks who acted for Tsingshan were demanding margin settlements and the closing of all positions. The big fear was that Tsingshan would struggle to make margin calls with its bankers, potentially facing billions of dollars in losses. Given nickel matte prices of roughly $15,421/t May 18, we calculate a profit margin of $5,571/t for Tsingshan's nickel in matte. Forbes places Xiang's real-time net worth at $1.2 billion. Why is nickel going up so drastically in a short period of time? 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. Sanctions imposed on Russia ignited market concern that Russia-origin nickel may be banned in Europe, which could cause a global supply deficit. The 145-year-old home of global metals trading has been heavily criticized by investors for its response to the crisis. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. Neither party seems very keen on this idea, however. That might have taken down some of the LME 's member-brokers. "For the period of the standstill, the participating hedge banks agree not to close out positions against Tsingshan or to make further margin calls in respect of existing positions. For most of the past decade, theyd traded between US$10,000 and US$20,000. https://www.wsj.com/articles/nickel-market-crisis-sends-london-metal-exchange-scrambling-to-prevent-damage-11646858558. However, the short position holders have to pay a margin. This market frenzy all came to a head on March 8, when the LMEhaving allowed nickel prices to surge by around 250 percent in just a couple of days and reach an all-time high of $101,365/metric tonne (mt) in intra-day trading, which was more than double the $48,078/mt at which it closed the previous daysuspended all trading of nickel. You should do your own research, looking at the latest news, technical analysis, and analyst commentary before trading. Nickel prices had been rising for weeks amid fears of disruptions to supplies from Russia. Why bet against nickel when you have a nickel business? The most notable holder of short positions is Tsingshan Holdings - one of the world's largest nickel and stainless steel producers - which is believed to own positions on about 100,000 tons of nickel with paper losses totaling up to $8 billion before the London Metal Exchange halted trading. As for the nickel market itself, prices remain elevated compared to before the short squeeze, possibly reflecting the persistence of Western sanctions on Russia. Contact us | For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. Xiang Guangda, who controls the worlds largest nickel producer, Tsingshan Holding, 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. Politics and policies being shaped by the agenda of President Biden 's administration of global metals trading has resolved... 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