According to the latest announcement from the Hong Kong Stock Exchange, three companies have filed lawsuits against its wholly-owned subsidiary, the London Metal Exchange, since June 6, with claims exceeding US$480 million, or approximately 3.2 billion yuan.

All of this was due to the London nickel short squeeze event known as the "Commodity Lehman Crisis" that occurred in March.

The Financial Associated Press reported that from March 7th to 8th, the price of nickel traded on the LME soared by nearly 250% for two consecutive days, which was called the "demon nickel" market by the market.

On March 8, 2022, nickel futures prices reached a record high of US$101,365 per ton.

The Chinese company Tsingshan Holdings allegedly held more than 100,000 tons of nickel short orders and suffered an "epic short squeeze". It lost billions of dollars overnight and was even unable to pay the deposit in time.

The London Metal Exchange announced that all transactions on March 8 were cancelled, nickel prices were pulled back to the closing price on the 7th, and trading was suspended for one week. After trading was resumed, a new trading system with price limits was introduced.

According to media reports, the LME also allowed Tsingshan to postpone the delivery of commodities, and Tsingshan retreated completely.

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.

It is reported that, unlike domestic investors who believe that price anomalies require special handling, some international funds and securities institutions are critical of the actions taken by the London Stock Exchange after the surge in nickel prices posed systemic risks to its market.

They believe that the operations of the London Stock Exchange intervened in the market on the one hand and rescued several securities firms from the dilemma of margin calls that could have devastating consequences. The Chinese enterprise Tsingshan Holdings Group also successfully reached an agreement with a syndicate of futures bank creditors.

Silent protocol.

On the other hand, it is also an extremely important factor that wipes out the huge profits of those investors who made bullish bets.

Data show that London nickel prices hit a 15-year high of about US$48,000 per ton on March 8.

But that doesn’t include canceled deals that closed at prices much higher than $48,000, worth about $4 billion.

At this point, the long and short parties in this epic round of Qingshan short squeeze have gradually emerged.

It is reported that two of the three companies that filed the lawsuit this time belong to two fund companies managed by Elliott Investment Management Company (transliteration, Elliott in English). This asset management company was established in 1977 and is headquartered in New York, USA.

, one of the largest activist funds in the world, with a management scale of over US$51.5 billion at the end of 2021.

In this claim, the amount involved is as high as US$456 million.

This means that even if the asset management company is not the largest bull, it is still one of the main short squeeze institutions.

Looking back on the entire incident, it starts with Tsingshan Holdings becoming the world’s nickel king.

According to the data, the predecessor of Tsingshan Holding Group is Zhejiang Fengye Group founded in 1992. It is one of the earliest private enterprises engaged in stainless steel production in China. The founders are Xiang Guangda and Zhang Jimin.

Subsequently, with the rapid growth of China's economic environment, this company gradually grew into an influential company in the domestic stainless steel industry.

But what really made Tsingshan Holdings a leader in the industry was the laterite nickel mining rights it won in Indonesia from 2008 to 2009.

It is reported that among the raw materials for stainless steel production, the highest cost component is not iron ore, but nickel metal that resists high-temperature corrosion.

Taking 300 series stainless steel as an example, nickel accounts for more than 50% of the cost.

Indonesia’s nickel reserves and production rank first in the world, and 23% of the world’s nickel reserves are in Indonesia.

In 2008-2009, amid the financial crisis and plummeting metal prices, Tsingshan Holdings paid heavily to acquire the mining rights of 47,000 hectares of laterite nickel ore in Indonesia, the world's largest nickel ore exporter.

After that, he continued to purchase nickel ore in Indonesia, India, Zimbabwe and other countries, and unknowingly became the "World Nickel King".

As of now, Tsingshan Holdings has an annual production capacity of over 10 million tons in the stainless steel field, ranking first in the world since 2014. The ferronickel smelting industry accounts for 12% of the world's production capacity with approximately 300,000 tons of nickel equivalent per year.

No. 1 in the world; nickel-chromium alloy material development, with an annual output value of nearly 100 billion, becoming a first-tier supplier to Apple and other companies; in the field of new energy, it has become one of the top five domestic lithium battery companies within three years of entering the market.

As the market becomes larger and larger, it accounts for an increasing proportion of global nickel transactions. Especially in March 2021, after Tsingshan Group opened up the technical path for fire-based high-ice nickel, Tsingshan Holdings unknowingly became

"Standing short" on the London Metal Exchange: As long as the price is right, sell transactions on the market.

Although it can't be called a powerful person, it definitely belongs to the status of a boss. Over time, he lost his respect for the market.

It is reported that nickel is widely used in the stainless steel market. However, due to the rapid growth of the energy market in recent years, more and more nickel is used in battery production.