Qingshan Holdings itself produces nickel, so in order to cope with the risk of falling nickel prices in daily operations, it holds short futures. But the problem is that the ice crystal nickel produced by Qingshan Holdings does not meet the trading standards of Lun Nickel.
Because in general, no matter what kind of nickel, the price is related, and the standard of ice crystal nickel is different from that of Jin Lun, but this kind of hedging can largely avoid the risk of price fluctuation.
Usually Qingshan Holdings always buys Russian nickel to close its position.
However, after the Russian-Ukrainian war, Russia was sanctioned and the exchange refused to accept Russian nickel, which led to the inability to deliver the short futures position held by Qingshan Holdings.