Nickel turmoil is back as prices spike 15% again to hit limit – by Mark Burton and Jack Farchy (Bloomberg/ – March 24, 2022)

Nickel surged by the 15% exchange limit for a second day in London, putting the spotlight back on bearish position holders just two weeks since the market was roiled by an historic short squeeze.

Nickel futures remained locked at the price limit by Thursday afternoon on the London Metal Exchange, as the latest spike extends a period of unprecedented turmoil for the market. Prices soared over 250% over two trading sessions in early March during the short squeeze centered on China’s Tsingshan Holding Group Co., before the market was suspended.

Tsingshan struck a deal with its banks to avoid further margin calls, allowing the market to reopen last week, and said it would reduce its short position in the future. Xiang Guangda, the owner of the nickel and stainless-steel giant, started buying contracts on the London Metal Exchange to reduce his short bet as the nickel market briefly unfroze this week, according to people familiar with the matter.

The move reduces the size of the potential pain for Xiang and his banks as prices are on the march again. However, the businessman and his allies have only reduced a portion of their total short position, and still hold large bets on falling prices, the people said.

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