Qingshan industry Xiang Guangda’s exclusive response to the first financial reporter received a lot of calls today. Qingshan is an excellent Chinese enterprise with no problems in position and operation.
In the process of lunni’s unilateral soaring upward, the news that China Qingshan group was squeezed also continued to ferment.
On March 8, the price of LME nickel futures contract rose to a maximum of US $101365 / ton from US $29770 / ton opened on the 7th. Affected by this, China’s commodity futures market closed on the 8th, and the main contract of Shanghai nickel continued to close at 228810 yuan / ton.
Subsequently, the London Metal Exchange (LME) suspended nickel trading and announced that it would postpone the delivery of all spot nickel contracts originally scheduled to be delivered on March 9; Cancel all nickel transactions executed on the OTC and LME select screen trading system on or after 00:00 a.m. UK time on March 8.
The new regulations on deferred delivery of the London stock exchange can alleviate the problems faced by Qingshan group. According to the exclusive response of Qingshan industry Xiang Guangda to the first financial reporter, we received a lot of calls today. Qingshan is an excellent Chinese enterprise with no problems in position and operation.
staged cross-border “forced air war”
In recent two days, it was said that Castle Peak Group held an empty order of 200000 tons of nickel futures contract, which was squeezed by foreign traders due to the lack of spot and unable to deliver. Previously, the media reported that Glencore held more than 60% of nickel futures.
The failure to deliver is the fatal problem of this incident, an industry source told the first financial reporter. “Qingshan group has Ferronickel, stainless steel and high matte nickel, but there is no LME nickel delivery variety electrolytic nickel.”
Public information shows that the nickel delivery products of LME are cathode nickel with nickel content of no less than 99.8% and meet the specifications of American raw material regulatory Association (ASTM). At present, the mainstream nickel products in the market include ferronickel (FeNi), nickel pig iron (NPI), nickel sulfate, high matte and other products. If the specifications of futures delivery products are different from the above nickel products, they cannot be delivered.
According to a research report of Haitong international, Qingshan holdings is a private enterprise specializing in stainless steel production. The company’s main business includes stainless steel and new energy industry chain. According to the company’s disclosure, its nickel equivalent production will reach Shanghai Pudong Development Bank Co.Ltd(600000) tons in 2021, 850000 tons in 2022 and 1.1 million tons in 2023. The upstream resource is ferronickel business, and the layout of laterite nickel mine in Indonesia.
In terms of production capacity, the ferronickel business of Qingshan holdings in China is mainly distributed through Fujian qingtuo group. At present, qingtuo group has formed an annual production capacity of 1.8 million tons of nickel alloy. Foreign business is realized through Indonesia’s Qingshan Park (IMIP) and widabe Industrial Park (IWIP), with a total capacity of more than 3.5 million tons / year.
“There is capacity, but it is passive without inventory.” According to the above analysis, usually, when hedging raw materials, manufacturers will build short positions to hedge the risk of future price decline, which is also the reason why Qingshan holdings holds short positions. However, when the price of lunni continues to soar, if Qingshan group chooses to continue to hold the empty orders, it needs to increase the contract deposit or move the warehouse to the far month contract, which will occupy a large amount of enterprise cash flow; If you choose to close short positions directly, the loss of 200000 tons of short positions will be about US $8 billion.
Due to the intensification of market fluctuation, LME metal inventory is generally low, and the spot premium of some varieties continues to strengthen. On March 8, LME will set the spot price difference limit and deferred delivery mechanism for the base metal contract for spot delivery, which may reduce the risk of position squeeze.
Specifically, LME adds a deferred delivery mechanism to all major contracts: members and their customers are prohibited from issuing tomorrow / next day arbitrage orders for aluminum, aluminum alloy, cobalt, copper, lead, North American special aluminum alloy, nickel, tin and zinc at any LME execution place at a price exceeding 1% of the official spot price of the previous day. If they cannot enter the spot / short metal delivery level on the first day of the month after the official metal delivery, they can not enter the spot / short metal delivery level at a premium of 9% for the metal that has not been delivered on the first day of the month.
cumulative huge risk
“At present, the market is still worried about the disturbance of nickel market supply under the situation of Ukraine. Russian nickel does have difficulties in US dollar settlement, Chinese L / C issuance and Russian nickel transportation.” The above traders pointed out.
Wang Jun, a non-ferrous precious metals analyst at founder medium term futures, told China business that at present, the global nickel inventory is low, and Russia is an important nickel producer and exporter. Driven by the external market, the nickel price in the Chinese market also rose strongly, breaking through the 220000 yuan / ton mark, leading the rise in China’s non-ferrous metal spot market. Under the combined effect of continuous fermentation of external events and tight supply and inventory, the global nickel price is expected to continue to be strong. It will be very important for LME to adjust rules and market regulation.
In terms of the recent commodity market performance, great risks have been accumulated.
In this regard, according to the announcement of the previous period, since the trading on March 10 (i.e. the night trading on March 9): the handling fee for closing the current position of nickel futures ni2204, ni2205, ni2206, ni2207, ni2208 and ni2209 within the contract day is adjusted to 60 yuan / hand.
Wuxi Stainless Steel Electronic Trading Center Co., Ltd. also issued a notice on the suspension of nickel trading, saying that the trading of all bill of lading sales agreements of nickel varieties will be suspended from March 8, and the resumption time will be notified separately; From the time of settlement on March 8, the deposit of all bill of lading sales agreements of nickel varieties will be adjusted to 20%. Before that, all dealers holding bill of lading sales agreements of nickel varieties will be limited to deposit.
The soaring nickel price has also had an impact on the industrial chain. A Research Report of Huatai futures said that affected by the capital game and warehouse squeeze in the LME nickel market, the price of Lun nickel has increased significantly, and the price of Shanghai nickel has increased continuously, resulting in the cold spot transactions in China recently. Under the current price, downstream enterprises have suffered serious losses and insufficient willingness to purchase.
Guotai Junan Securities Co.Ltd(601211) futures analysis: from the perspective of trading, the game between long and short sides is becoming more and more intense, and the nickel holding warehouse inventory ratio in overseas LME market has reached a high level over the years. With the sharp rise of overseas nickel price and freight, the import and export profits are upside down, and the Shanghai Lun ratio falls to 6.72. In the short term, the supplement of imports to China’s low inventory will be weak.
Huatai futures believes that the supply and demand expectation of nickel midline is not optimistic, but there are also variables in the midline expectation. Recently, lunni has greatly strengthened due to the influence of capital game and position squeeze, and the price has been far away from the scope of supply and demand. Before the end of capital game, it may still maintain a strong trend. However, the current price has been seriously separated from supply and demand, and the downstream has suffered a large loss, so it needs to be treated with caution.
