From VW to JPMorgan, the Unlikely Cast Behind Nickel’s Big Squeeze – by Jack Farchy (Bloomberg News – March 28, 2022)

(Bloomberg) — Furious investors and traders. Evaporating liquidity. A market that many veterans simply describe as “broken.” It’s been three weeks since nickel was suspended on the London Metal Exchange after a 250% price spike and while trading has resumed, the market remains all but paralyzed.

As the crisis plays out, accusations are already beginning to fly. Investors are preparing lawsuits; the LME and its regulator, the Financial Conduct Authority, are likely to run investigations. It’s far from clear that any party broke any rules — it may be that the rules just weren’t fit for purpose.

Getting to the bottom of who did what, when, and why, could take months or years. In the meantime, here’s a rundown of the key players in the great nickel short squeeze.

The Shorts: Big Shot (and Friends)

At the center of the crisis is entrepreneur Xiang Guangda, whose Tsingshan Holding Group Co. is the world’s biggest nickel and stainless steel company. The tycoon known as “Big Shot” in Chinese commodity circles had built a giant short position in LME nickel in a bet that increasing supply from his company would drive down prices. When nickel rose rapidly after Russia’s invasion of Ukraine, Tsingshan struggled to pay its margin calls, setting the stage for a short squeeze.

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