Published on :
Commodity prices have exploded since the war in Ukraine. This is the case of nickel, which has reached peaks: more than 100,000 dollars per ton. On Tuesday, the London Metal Exchange suspended nickel trading to calm the storm. A situation that hits hard Xiang Guangda, the Chinese nickel magnate, according to the Bloomberg agency.
“Big Shot”, as it is nicknamed in financial circles, would have taken important positions on nickel for months, betting on the fall in the price of this silvery metal used to manufacture stainless steel and batteries for vehicles electrical. Faced with rising demand due to electric cars, the price had already increased by more than 30% in 2019, 20% in 2020 and then 25% in 2021.
bad bet
But bad luck, its price was multiplied by three in two days, a level not reached for 145 years, when the institution was born. In question, the escalation of the conflict in Ukraine and the prospects of sanctions on Russian raw materials. Russia is the world’s third largest nickel producer with 13% of mining capacity in 2021, behind Indonesia and the Philippines.
By making a mistake in strategy, Xiang Guangda, boss of Tsingshan, the Chinese nickel production giant, is causing his company to lose billions of dollars. It also drags in its wake its broker, the China Construction Bank, which obtained a delay from the London Metal Exchange to try to minimize the damage.
►Also read: Chronicle of raw materials – The price of nickel ignites