London Metal Exchange Suspended Nickel Trading

March 8, according to the Financial Union reported: London Metal Exchange (LME) nickel prices soared, about the domestic Tsingshan Holding Group holding nickel short futures contract was forced to spread rumors. Tsingshan Holding Group is a private enterprise specializing in stainless steel production, which has formed the whole industrial chain layout from nickel mining, nickel iron smelting to stainless steel smelting, stainless steel continuous casting billet production andstainless steel plate, rod and wire processing. According to the company's disclosure, its nickel production will reach 600,000 tons in 2021, 850,000 tons in 2022, and jump to 1.1 million tons in 2023.

Tsingshan Holding Group in the domestic nickel iron business mainly through Fujian Qingtuo Group layout. At present, Qingtuo Group has formed an annual production capacity of 1.8 million tons of nickel alloy. The overseas business is achieved through Indonesia Morowali Industrial Park (IMIP) and Indonesia Weda Bay Industrial Park, with a total capacity of more than 3.5 million tons per year.

Failure to deliver is the fatal problem of this event. Tsingshan does not have electrolytic nickel, the LME nickel delivery variety, according to an industry source. In the case of LME nickel continues to soar, if Tsingshan choose to continue to hold empty orders, the company should increase the contract margin or move the far month contract, which will occupy a lot of cash flow; Unwinding short positions outright would have cost about $8 billion. (From Financial network).