Chinese tycoon’s ‘big short’ on nickel trips up Tsingshan’s miracle growth – by Praveen Menon, Min Zhang and Fransiska Nangoy (Reuters – March 14, 2022)

March 14 (Reuters) – (This March 13 story corrects size of Morowali industrial park in paragraph 20, and to show production data is for whole company, not only for its Sulawesi facilities, in paragraph 21)

Chinese tycoon Xiang Guangda has to find a way to bail his Tsingshan Holding Group out of a crisis after its bet on nickel prices backfired, fuelling more volatility in a metal essential for the electric vehicles industry.

One of the world’s top nickel producers faces massive losses on its short positions after prices soared over $100,000 per tonne last week and forced the London Metal Exchange to halt nickel trading.

Tsingshan has to either pay off the outstanding short positions, which could be as high as $8 billion, or prove it has sufficient deliverable nickel to repay in kind.

Beijing could step in to rescue Tsingshan, a source familiar with the matter told Reuters. China could swap some of its high grade nickel reserves for low grade nickel pig iron (NPI) that Tsingshan produces to help it meet LME quality standards. China is estimated to hold around 100,000 tonnes of nickel in state stocks, two analysts said.

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