Knotty nickel supply chain highly exposed to fresh shocks – by Frik Els ( – July 21, 2022)

The nickel market is hostage to two mercurial players: Russia’s Vladimir Potanin and China’s Xiang Guangda. Nicknamed the Nickel King and nickel’s Big Shot, both the bosses of Norilsk and Tsingshan have swayed the market for decades.

But now the pair’s impact on nickel trading is even more outsized, thanks to the war in Ukraine and the fallout of Xiang’s big short, which was built up on the belief his company can again transform the fundamentals of the nickel supply chain.

Big shot, big short

While the physical market was digesting the possible impact of Russia’s invasion of Ukraine at the end of February, the March short squeeze “threatened to trigger a Lehman Brothers-like shock through the entire metals industry and possibly topple the London Metal Exchange itself,” according to one report.

After briefly sending nickel above $100,000 a tonne, Xiang walked away only $1 billion or so poorer (the position was valued around $8 billion at the time) and a chastened LME reopened trade in the devil’s copper.

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