All this is due to a short-selling event in London nickel futures in March, which was called "commodity Lehman crisis".
Cailian reported that on March 7 -8, the price of nickel traded by LME soared by nearly 250% for two consecutive days, which was called the "devil nickel" market by the market.
On March 8, 2022, the nickel futures price reached an all-time high of $36,500 per ton10./kloc-0.
Qingshan Holdings, a Chinese enterprise, is said to have1000000 tons of nickel empty bills in its hand, which was "forced by epic" to lose billions overnight and even failed to pay the deposit in time.
The London Metal Exchange announced the cancellation of all trading on March 8, and the nickel price was pulled back to the closing price on July 7, and trading was suspended 1 week. After the resumption of trading, a new trading system with price limit was introduced.
According to media reports, LME also allowed Qingshan Company to delay delivery, so Qingshan Company was able to escape.
Subsequently, although the liquidity of London nickel futures declined, the overall price began to move closer to the spot market.
The role played by the London Stock Exchange has been criticized by many parties.
According to reports, unlike domestic investors who think that abnormal prices need special treatment, some international funds and securities institutions are critical of the actions taken by the London Stock Exchange after the soaring nickel price poses a systemic risk to its market.
In their view, the operation of the London Stock Exchange intervened in the market on the one hand, and rescued several brokers from the predicament that additional margin may have devastating consequences. China Qingshan Holding Group also successfully reached a silence agreement with a syndicate of creditors of futures banks.
On the other hand, it is also an extremely important factor, which obliterates the huge profits of investors who bet bullish.
The data shows that the price of nickel in London hit a high of $48,000 per ton 15 on March 8.
However, this does not include transactions cancelled at a price far higher than $48,000, which are worth about $4 billion.
At this point, the long and short sides in this epic forced landing of Qingshan gradually surfaced.
It is reported that two of the three companies that filed this lawsuit belong to two fund companies under the management of Elliott Investment Management Company, which was established in 1977 and headquartered in new york, USA, and is one of the largest radical funds in the world. At the end of 20021,the management scale exceeded $51500 million.
In this claim, the amount involved is as high as $456 million.
This means that even if the asset management company is not the largest multi-party, it is also one of the main short-selling institutions.
Looking back on the whole incident, we should start with Qingshan Holdings becoming the world's nickel king.
According to the data, the predecessor of Qingshan Holding Group is Zhejiang Ye Feng Group, which was established in 1992. It is the earliest private enterprise engaged in stainless steel production in China, and its founders are Xiangguang Da and Zhang Jimin.
Subsequently, with the rapid growth of China's economic environment, this enterprise gradually grew into an influential enterprise in the domestic stainless steel industry.
However, what really made Qingshan Holdings become the industry leader was the laterite nickel mining right won in Indonesia in 2008-2009.
It is reported that among the raw materials for stainless steel production, the highest cost is not iron ore, but nickel metal, which plays a role in resisting high temperature corrosion.
Taking 300 series stainless steel as an example, nickel accounts for more than 50% of the cost.
Indonesia ranks first in nickel reserves and production in the world, and 23% of the world's nickel reserves are in Indonesia.
In 2008-2009, during the financial crisis and the collapse of metal prices, Qingshan Holdings acquired 47,000 hectares of laterite nickel mining rights in Indonesia, the world's largest nickel exporter.
After that, he continued to buy nickel ore in Indonesia, India, Zimbabwe and other countries, and unconsciously became the "world nickel king".
Up to now, Qingshan Holdings has formed an annual production capacity of over100000 tons in the field of stainless steel, ranking first in the world since 20 14; The ferronickel smelting industry ranks first in the world with about 300,000 tons of nickel equivalent per year accounting for 12% of the world's production capacity; Nickel-chromium alloy material development, with an annual output value of nearly 100 billion, has become a first-class supplier for companies such as Apple; In the field of new energy, it has become the top five domestic lithium battery enterprises in the past three years.
As the plates get bigger and bigger, they account for more and more of the global nickel trade. Especially in March of 20021year, after Qingshan group opened up the technical path of pyrometallurgical nickel matte, Qingshan Holdings unconsciously became a "short" on the London Metal Exchange: as long as the price is right, it will be sold on the plate.
Although it can't be called giving orders, it definitely belongs to the position of big boss. Over time, I lost my awe of the market.
It is reported that nickel is widely used in stainless steel market, but in recent years, due to the rapid growth of energy market, more and more nickel is used in battery production.
According to the statistics of professional organizations, 54% of the battery capacity deployed last year used positive electrode chemical materials with high nickel content, 26% used low nickel chemical products, and only 20% used nickel-free products.
More data show that the amount of nickel used in new electric vehicles reached a record 1965 1 ton in February last year, up 44% year-on-year and 29% quarter-on-quarter.
The whole electric vehicle revolution is rapidly approaching an important critical point, which also leads to the extensive collection of the prices of nickel and cobalt anode materials.
At the same time, the global economy showed obvious signs of slowing down due to the epidemic. Since February this year, the relationship between Russia and Ukraine has been deteriorating, causing many investors to avoid goods from Russia.
As Russia is an important exporter of pure nickel in the world, the price of nickel in London continued to rise in March.
However, with a production capacity of 300,000 tons, Qingshan Holdings, which is naturally short-selling, is still selling, even facing the ever-rising historical high nickel price, and there are signs of "heavy positions overnight".
The data shows that the production cost of Castle Peak in Indonesia is less than 1 10,000 USD per ton. With the increasing book floating profit, short positions in Qingshan are also accumulating.
At the same time, according to the data of the London Metal Exchange, as of February 9, 2022, an unidentified nickel inventory holder held at least half of the inventory of the London Metal Exchange.
According to the trading rules of London Stock Exchange, LME warehouse receipt holders can withdraw the spot according to the warehouse receipt.
The situation of long-short confrontation has been formed, but Qingshan Holdings, which has occupied a dominant position for a long time, has not realized it.
With the outbreak of the conflict between Russia and Ukraine on February 24, the London market began to sound the voice of banning Russian metal trading, and Qingshan Holdings still did not realize the possible risks.
The time was fixed on March 7, and nickel once soared by 78%, reaching a maximum of $55,000/ton, setting the biggest trading day increase in history.
At the close, nickel closed up 76% to $50,905/ton, the highest since June 2007.
On March 8th, new news began to flow out of the market, saying that the London Stock Exchange had banned Russian-nickel trading, and the nickel delivery standard stipulated by the exchange was pure nickel with the lowest metal content of 99.8%, while the high-grade matte nickel produced by Qingshan Holdings did not meet the delivery standard, and the short seller's margin was insufficient.
Some of these news are true and some are false, but under the cover of true news, fake news has also become true news.
Subsequently, the price of LME nickel rose to 100% in one day, exceeding $60,000, $70,000, $80,000, $90,000 and 100, and rose by 248% in two trading days, setting a record high.
Due to the soaring price, the London Metal Exchange rarely suspended nickel futures trading that afternoon, and in the subsequent notice, all trading information of the day was cancelled.
These operations are also considered that the exchange is protecting the interests of China companies, which is one of the main reasons why Eliot and other companies claim compensation from the London Metal Exchange.
As a party to the incident, the relevant person of Qingshan Holdings responded on the afternoon of the 8 th that "the company is already in a meeting in the morning and is sorting out relevant materials and contents. At that time, it will make a unified public response. It is uncertain whether you can respond today.
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On the same day, Xiang Guangda of Qingshan Industry said: "Foreigners do have some actions and are actively coordinating.
Received a lot of phone calls, the relevant state departments and leaders are very supportive of Castle Peak.
On the afternoon of March 8, Chairman of the Board of Directors of Castle Peak Industry told Everbright that Castle Peak is an excellent enterprise in China, and there is no problem in its positioning and operation.
On March 9, Qingshan Holdings unilaterally stated that it had replaced its high matte nickel with domestic metal nickel plate, and deployed it to sufficient spot for delivery through various channels.
On March 15, Qingshan issued an official announcement again, saying that it had reached a silence agreement with the syndicate composed of creditors of the futures bank, agreeing not to open positions or requesting additional margin for existing positions.
At this point, the epic nickel futures market in the international commodity market has come to an end, but what is left to the market is far more than the departure of both long and short sides.
Judging from the impact of the incident, the impact of the nickel storm on the market still has residual temperature, and the liquidity of nickel is not as good as before.
According to foreign media reports, LME pinned its hopes for growth on attracting American hedge funds and other financial investors for most of the past 10 years.
At the end of March this year, many of these financial investors said that they might give up entering LME, and some of them started lawsuits in the United States and Britain.
It is worth noting that while the London Metal Exchange was sued for recovery, Glencore, which was previously suspected to be the main force of Castle Peak, was also under investigation for bribery and market manipulation. After agreeing to pay a fine as high as $654.38+05 billion, the latest development shows that two former executives are directly involved in bribery cases.
Founded in Switzerland, Glencore is the world's largest commodity trader, the world's largest zinc producer, the third largest copper producer and the largest cobalt supplier.
In the past year, Glencore's share price soared by 70% due to the soaring prices of major commodities such as coal, cobalt and nickel.
Since the beginning of this year, due to the "epic" nickel incident, Glencore has been caught in the rumor of "forcing Castle Peak Holdings" and was incorporated in China.