On March 7, an LME nickel price soared, and the 200000 ton short position of Castle Peak holdings was forced by Glencore, which blew up the futures circle with a loss of $8 billion. On March 8, the main contract of nickel on the London Metal Exchange (LME) broke the $100000 mark, with a cumulative increase of 248% in the two trading days and a record high.
On March 8, LME announced that it would suspend nickel futures trading with abnormal fluctuations from 8:15 a.m. Beijing time on March 9, cancel all nickel trading on the OTC and lmeselect trading system since 0:00 on March 8, and postpone the delivery of spot nickel contracts to be delivered on March 9.
Once the transaction is declared null and void, Castle Peak holdings, which is rumored to hold 200000 short positions, will temporarily be exempted from the rumored position explosion warning, but this does not mean that Castle Peak Holdings has been unharmed in the air tight war. On March 7, the main contract of LME nickel rose by 40%, and the transaction on that day was not declared invalid.
Castle Peak holdings closing alarm or lifting
precious metal transaction forced a temporary truce
On March 8, LME said in its announcement that at present, all members of the clearing house fully meet their respective margin requirements. However, LME also knows that the credit environment of the overall commodity market is in a tense state after geopolitical events and soaring prices. Therefore, the exchange is not expected to resume the trading of nickel futures before March 11, and will inform the market before 2 p.m. the day before the resumption of Trading (London time) at the latest.
The reason for forcing LME to suspend nickel futures trading is related to the rumor that Castle Peak holdings, which controls the largest short position in the nickel market, has broken its position. As of March 9, Qingshan holdings had not made a detailed reply to external rumors. Xiang Guangda, the actual controller of Qingshan holdings, responded through market-oriented media only on March 8 that foreign investment did have some actions and was actively coordinating. Castle Peak is an excellent Chinese enterprise with no problems in position and operation.
Castle Peak holdings, which became famous in World War I in the air war, is also associated with a number of listed companies.
Earlier, Castle Peak holdings announced that it had joined hands with Zhejiang Huayou Cobalt Co.Ltd(603799) and Gem Co.Ltd(002340) to develop laterite nickel ore in Indonesia to build a new energy battery nickel resource raw material manufacturing system; Join hands with XCMG group to enter the new energy vehicle industry. Qingshan holdings also signed high nickel matte supply agreements with Zhejiang Huayou Cobalt Co.Ltd(603799) , Cngr Advanced Material Co.Ltd(300919) and agreed that Qingshan industry will supply 60000 tons of high nickel matte to Zhejiang Huayou Cobalt Co.Ltd(603799) and 40000 tons of high nickel matte to Cngr Advanced Material Co.Ltd(300919) within one year from October 2021.
nickel price soars
listed companies responded to queries
No matter how the futures trading rose, the news of nickel spot commodity price rise continued to spread. On the short video platform, a user named Higginson Steel said that the main product of stainless steel (tiktok) rose from 10 thousand yuan / ton to 30 thousand yuan / ton for 2 years, from 30 thousand yuan / ton to 60 thousand yuan / ton for 20 hours, from 60 thousand yuan / ton to 100 thousand yuan / ton for 20 minutes.
The sharp rise in nickel prices has also attracted many A-share listed companies to respond.
Pengxin energy replied to investors on March 9: “the company does not directly own nickel ore, but has some equity participation. Its main business is copper and gold, involving copper and gold. The nickel business is not within the scope of the consolidated statements, but equity investment. For the time being, it has no special impact on the company.”
In addition, Chengtun Mining Group Co.Ltd(600711) also replied to e interactive investors on March 9 that the company did not participate in copper nickel futures market speculation and was cautious about the hedging business in the futures market of existing production varieties. At present, the number of hedging positions is small, which is far less than the product output owned by the company. At present, the impact of extreme market fluctuations on the company is limited. The production and operation of nickel, cobalt and copper sectors of the company are normal. The short-term extreme rise and fall of the metal market is greatly affected by market funds and emotions, but it will eventually return to rationality.
As a manufacturer of new energy batteries, Hunan Corun New Energy Co.Ltd(600478) also responded to investors’ questions about whether the nickel price increase had an impact on the company’s cost and profit Hunan Corun New Energy Co.Ltd(600478) reply to the investors of e interactive platform that the rapid rise of nickel price has little impact on the company. On the one hand, the company locks in the phased procurement cost by hedging the raw materials of bulk commodities; On the other hand, the pricing model of nickel products and downstream customers of the company is dynamically adjusted with the price fluctuation of raw materials, so the price fluctuation of raw materials has little impact on the production cost of the company. In addition, the company will regularly reserve a certain scale of raw materials to ensure normal periodic production and operation.
Ningbo Ronbay New Energy Technology Co.Ltd(688005) released the announcement of the investor exchange telephone conference on March 8, saying that the company’s raw material supply was normal and the raw material inventory cycle remained within a reasonable range. The rise of metal nickel price will not affect the profitability of the company in the short term, and the company does not participate in nickel futures trading. At present, due to panic and speculation in the futures market, nickel prices have risen rapidly in the short term. In the long run, from the perspective of nickel supply and demand balance, the current high price state is unsustainable.
Gem Co.Ltd(002340) announced on March 9 that the company has never participated in the operation of nickel futures, the current position of nickel futures is zero, and the company’s production, operation and operating performance are not affected by this nickel futures event Gem Co.Ltd(002340) ternary precursor orders account for more than 60% of the export orders, and the trading is carried out based on the monthly average price. The sharp decline and rise of nickel in the short term will not affect the Gem Co.Ltd(002340) trading pricing system and have no substantive impact on the operation.
For the follow-up trend of nickel price, China Securities Co.Ltd(601066) futures said in the latest research report that LME suspended nickel trading after the historical rise of Lun nickel. The current sharp rise in nickel price has been divorced from the fundamentals, and the spot market has fallen into a temporary stagnation. The downstream cannot accept the current high price and waits for the market to return to normal. On the whole, although the nickel sector still has positive support, the follow-up risks can not be ignored. It is suggested to choose more opportunities to close positions and leave in the early stage.
