After more than three months, the “demon nickel short-squeeze war” finally came to an end.RMB 800 million).
At the end of last month, Tsingshan’s nickel short position in the London Metal Exchange (LME) has been reduced to regarding 30,000 tons, far below the more than 150,000 tons at the time of the incident, and these positions are not held through JP Morgan Chase, which is likely to be the result of the negotiation between the two parties.
What happened in the past three months? The following will briefly sort out the process of the Lun nickel incident:
On March 7, London nickel futures soared from $29,000 per ton to $55,000, hitting a 15-year high.
On March 8, London nickel futures rose from $60,000 to $100,000 in a straight line in less than an hour.
At 08:15 (UK time) on March 8, the LME suspended all nickel contract trading and cancelled trading following 00:00 on March 8.
On March 9, Xiang Guangda admitted that he was short-sold by foreign capital and had obtained sufficient cash through various channels.
On March 15, Tsingshan stated that it had reached a silent agreement with a syndicate of futures bank creditors, and the syndicate would not close its positions, while Tsingshan would reduce its positions.
On March 16, the LME resumed nickel trading.
On June 29, Qingshan’s nickel short position in the LME was reduced to regarding 30,000 tons, and the incident ended.
Those who do not understand the details may ask: Why is Qingshan targeted by Wall Street capital? This really can’t blame Wall Street Capital, Qingshan cultivated himself “Tang Monk meat”, who doesn’t want to eat it? Qingshan has three fatal flaws in this matter:
1. The nickel produced by Tsingshan is different from the delivery product of LME. The LME deliverables are electrolytic nickel with a purity of more than 99.8%, while the nickel produced by Qingshan has only high nickel matte with a nickel content of regarding 70% and ferronickel with a nickel content of regarding 10%.
2. There was a problem with Tsingshan’s hedging operation. At that time, Tsingshan bought 200,000 tons of futures short orders, but the entire LME nickel inventory was only 80,000 tons, which means that Tsingshan bought all the LME nickel, and might not get half of the futures short. one.
3. Usually, when Qingshan encounters the delivery period, it will buy nickel from Russia to close its position. However, the conflict between Russia and Ukraine led to a reversal of market logic, and Russian nickel was embargoed, but Qingshan did not respond in time.
To sum up, although Qingshan has a deep family background, on this card table, Qingshan played all the good cards, which caused others to not be able to afford any cards. In such a situation, how might Wall Street capital let go of this seemingly “must-win” hunt?
Therefore, Wall Street capital quickly raised the price of nickel futures on March 7 and March 8, and the futures of 20,000 to 30,000 US dollars quickly rose to 100,000 US dollars.
The situation at the time was that if Qingshan might not deliver it, he would have to pay for it.RMBHundreds of billions of yuan, and if you have no money, you have to sell Indonesian nickel ore.
However, this time, Wall Street’s capital miscalculated. Wall Street is still number one in the financial field, but their opponents are not without progress. Through years of hard work, Chinese enterprises have acquired rich market experience and a large amount of capital, and have the ability to fight back.
Although Aoyama didn’t know who was going to attack at the time, he started to fight back on March 9. Qingshan said that it will replace domestic metal nickel plates with its high matte nickel plates, and has obtained sufficient cash through various channels for delivery.
At that time, several large enterprises in the industry participated in the replacement, which can be said to be united. Xiang Guangda’s original words were: “We have received many calls, and relevant state departments and leaders are very supportive of Qingshan.”
So, in the end, why didn’t Qingshan take out 200,000 tons of nickel delivery products and hand them over to Wall Street pickers, so that they had nowhere to store the goods, and finally they might only sell them at a low price and lose tens of billions of dollars?
Qingshan has collected 200,000 tons of nickel delivery products, which can solve the urgent need, but what should domestic enterprises do if so much nickel is handed over? Do all companies stop production, wait a few months, and then resume production when new nickel is produced?
Qingshan did this, although it was very relieved, but the price paid was too great.
Therefore, from March 9th to March 15th, Xiang Guangda negotiated with his opponents and finally reached a “silent agreement” when he might produce 200,000 tons of deliverables.
Now that Qingshan has turned the corner and reduced its short positions, although Wall Street institutions lost a little money, it can be said that both sides can accept the result of avoiding the expansion of losses.