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Nickel is back!

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Nickel and Wheat, who would have guessed.
Waiting to see what happens tonight.
Already dropped $5 from its high yesterday, but I think it will remain well above last week's prices and stay for weeks or months ahead - at least until the Russians get an ability to use SWIFT again.
 
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Which ASX miners would be best exposed to this? I imagine that none of the miners have supply contracts based on the current spot price...
 
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London metal exchange suspended trading in Nickel, when it hit $100,000 tonne. OM
I'm stating to think this is in part due to LME itself.
From Reuters this morning:
"The LME, which clears all trading of its metals contracts, said on Friday it was raising margin requirements for nickel contracts by 12.5% to $2,250 a tonne. The extra charge kicks in at close of business on Tuesday, March 8."

From LME, the notice
 

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Fellow nickel bulls, strap yourselves in, this could by an exciting ride.🥳
This is not going to be resolved quickly.
If Tsingshan and their brokers default (as well as others that have shorted Nickel futures) then LME Clear is going to suffer some really serious pain.
 
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greggles

I'll be back!
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Looking very messy indeed.

(Bloomberg) -- The tycoon whose big short bet on nickel helped trigger one of the most dramatic price spikes in history has told his banks and brokers that he doesn’t intend to reduce his position, according to people familiar with the matter.

The move is a characteristic display of self-confidence from Xiang Guangda, the owner of Tsingshan Holding Group Co., and means that the nickel market could be set for more fireworks once it reopens.

The London Metal Exchange halted trading in nickel on Tuesday morning after prices spiked as much as 250% in two days, driven by brokers rushing to close out short positions after holders of bearish bets including Tsingshan struggled to make margin calls.

 
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Yep!
Due to confidentiality it is not named, but speculation has it that a major counterparty to Tsingshan 's shorts is Glencore.
Also not confirmed and is speculation, is that Glencore owns between 50 & 80% of the Nickel held in LME warehouses.
LME warehouses also hold some Russian Nickel, which is effectively frozen due to sanctions. This reduces the actual available warehouse stocks that can be traded.
Very deep doo-doo
 
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I still can't get excited about pig nickel, just my opinion. It may be a great trading opportunity, but for me as a buy and hold for a while person, it just doesn't fit for me. It's only one Gretta from disaster. 🤣
 

Sean K

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LME to resume trading Nickel Contracts at 08:00 London time on Wednesday 16 March 2022, with daily price movement limits for all base metals.

TRADING 22 064 NICKEL MARKET UPDATE RESUMPTION OF TRADING

Can we assume PON is going limit down until it gets back to where it was before the big short backfired?

Daily Price Limits

10. In Notice 22/055 the LME confirmed its intention to set a daily maximum limit-up and limit-down for order submission (“daily price limits”).

11. Whilst price moves in the Nickel market have been a key focus, the LME has observed high levels of volatility across the base metals markets more broadly. Market participants have raised concern regarding the risk of sudden, extreme price moves in other metals, particularly given the geopolitical backdrop. Having regard to such concerns and its own assessment of market conditions, the LME has taken the decision to set daily price limits in either direction for all base metal outright Contracts, on all Execution Venues.

12. The LME will apply daily price limits in either direction for all base metal outright Contracts except Nickel, with effect from the start of trading on 15 March, and will apply daily price limits in either direction for Nickel outright Contracts with effect from the start of trading on 16 March. Paragraph 13 specifies precise daily price limits for all metal outright Contracts except Nickel, and provides an indicative range in relation to Nickel. The precise levels of these limits for Nickel will be confirmed by Notice, by 14:00 London time on 15 March.

13. The upper daily price limit for any outright Contract will be the previous Business Day’s Closing Price for that contract, plus (i) for Nickel, at least 5% having previously guided 10%, and will keep under Page 3 review in light of market conditions, or (ii) 15% for all other base metals, in both cases of the previous Business Day’s Closing Price for the 3-month Contract for the relevant metal. The lower daily price limit for any outright Contract will be the previous Business Day’s Closing Price for that Contract minus (i) for Nickel, at least 5% having previously guided 10%, and will keep under review in light of market conditions, or (ii) 15% for all other base metals, in both cases of the previous Business Day’s Closing Price for the 3-month Contract for the relevant metal. For the avoidance of doubt in relation to Nickel, the previous Business Day’s Closing Price for these purposes shall be the Closing Price on 7 March 2022. The Notice referred to in paragraph 12 shall also confirm the USD values for the Closing Price curve, as at market open on the Resumption Date.
 

Dona Ferentes

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Can the London Metal Exchange restart trading in the nickel contract after a week of suspension to allow a big Chinese company to be bailed out from a multibillion dollar mistake?

Traders will again be watching the nickel contract on the London Metal Exchange where the LME plans to restart trading on Wednesday (8am London time). Hundreds of companies large and small, including miners, brokers, traders, advisers of all types and majors like BHP, Vale (which owns the old Inco mines in Canada), Nickel Mines, Glencore, Western Areas and IGO will be watching to see how prices move.

They will be watching to see if a truce struck between the Chinese company at the centre of the trading debacle, Tsingshan Holding and its banks holds or whether it fails if there is another rapid price movement – almost certainly a fall initially. Banks including JPMorgan Chase and Standard Chartered have agreed not to close out Tsingshan’s position or make further margin calls — demands for extra cash to cover losses.

The Financial Times reported that other bank counterparties to Tsingshan’s huge (and failed) bet on lower nickel prices are Chinese lenders ICBC and China Construction Bank which means the Chinese government has been involved in the talks

The standstill agreement will give the two sides time to reach a deal on a new secured credit facility that the world’s biggest stainless-steel producer can use for its “nickel margin and settlement requirements”.

In a rare public statement, the privately owned company said an “integral feature” of the agreement was a “provision for the existing hedge positions to be reduced by the Tsingshan Group in a fair and orderly manner as abnormal market conditions subside”.

The LME suspended dealings in nickel last Tuesday and cancelled thousands of trades after its benchmark contract doubled to a record above $US100,000 a tonne, bringing global trading in the metal to a halt.

The LME will introduce daily price limits for all of its metals including nickel. Members will also be asked to disclose all Over the Counter positions in nickel greater than 100 lots until further notice.

“The LME notes in particular that a large client of the market has now published details relating to the support of a banking consortium, which could suggest that the potential for further disorderly conditions may be mitigated,” the exchange said in a statement, its third since the crisis emerged on Tuesday of last week.

 
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