How will the “demon nickel” incident end? Castle Peak holdings issued a statement: it has reached a silent agreement with the syndicate. LME nickel is about to resume trading. How can we go in the future?

New progress has been made in the lunni position pressing event.

In March 15th, the official account issued by the Shanghai public trading company “Qingshan industrial Tsingshan” issued by the Qingdao Shan Trading Co., Ltd., the main account, showed that the Qingshan holding company had reached a silent agreement with the syndicate made up of creditors of the futures bank, and agreed to liquidate the position or increase the margin for the existing positions. “The” Tsingshan “

After a week of suspension of nickel trading, on March 14 local time, the London Metal Exchange (LME) announced that it confirmed that the LME nickel contract would resume trading at all LME execution venues at 8:00 London time on March 16 (Wednesday), and would impose price limits on all metals, including nickel.

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Countermeasures of Qingshan holdings

According to the important statement issued by Qingshan industry, Qingshan group has reached a silent agreement with a syndicate composed of creditors of futures banks. During the quiet period, Castle Peak and the syndicate will actively negotiate and implement the standby and guaranteed liquidity credit, which is mainly used for Castle Peak’s nickel position margin and settlement needs.

During the silent period, the participating futures banks agreed not to close the positions of Castle Peak, or requested to increase the margin for the existing positions. As an important part of the agreement, Castle Peak Group shall reduce its existing positions in a reasonable and orderly manner with the elimination of abnormal market conditions.

In terms of supply, it is reported that Qingshan Holdings has reached an agreement with two large-scale nickel using enterprises (power battery raw material enterprises), which provide Qingshan with a total of 4000 tons of pure nickel warehouse receipts every month for physical delivery of nickel futures.

“this is the first official statement issued by Castle Peak holdings after it was rumored that Castle Peak holdings was forced to close its position. It shows that this is a more appropriate countermeasure that castle peak can consider at present. From this statement, Castle Peak is not ready for nickel for physical delivery, and will eventually exit through disk closing.” a person in the futures industry who asked not to be named told the reporter of E company that Qingshan and the syndicate will actively negotiate to implement standby and guaranteed liquidity credit, which is mainly used for the nickel position margin and settlement needs of Qingshan, which also means that Qingshan should make some asset pledges or meet other conditions in exchange for the support of the syndicate.

Last week, LME nickel staged a short market. The price of LME nickel rose by more than 100% during the session, breaking the $60000, $70000, $80000, $90000 and $100000 mark. LME announced the suspension of nickel trading on March 8. It is reported that Castle Peak holdings, which held a large number of short positions in the event, has attracted much attention. Due to the contraction of nickel supply due to geographical conflicts and other factors, the loophole of insufficient large short orders and delivery products of Castle Peak Group has been frantically forced short by international capital.

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lme is about to resume nickel trading

LME announced the suspension of nickel trading after an epic short squeeze in nickel prices. After a week, the nickel trade will restart soon. On March 14 local time, LME issued an announcement confirming that the LME nickel contract will resume trading at all LME execution sites at 8:00 London time on Wednesday, March 16, 2022.

It is worth noting that LME revised the trading rules and began to limit the price of all metals, including nickel. From March 15, LME implemented daily price limits in two directions for all base metal contracts except nickel. The price limit range is 15% up and down of the closing price of the previous trading day (subject to the three-month contract price of relevant metals, the same below); From March 16, the daily price limit will be implemented for the nickel contract, with the price limit range of 5% up and down of the closing price of the previous trading day, and this standard will continue to be reviewed according to the market conditions.

LME is also strengthening the management of the nickel market and will require all brokers to disclose all positions of more than 600 tons of nickel held by their customers. Trading members are also required to provide LME with additional information and regular reports on the total nickel positions of the exchange and OTC. In addition, the delivery time of all nickel contracts signed before March 16 and with a delivery period between March 16 and March 22 (inclusive) will be postponed to March 23.

“it is planned to reassess the rationality of the nickel intraday rise and fall limit at the end of the transaction on March 16, and adjust these limits according to the current market conditions.” LME said.

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nickel price how to follow up

After the resumption of nickel trading, whether the nickel price will return to rationality has attracted much market attention. In this regard, China Securities Co.Ltd(601066) futures believes that considering that the nickel price of LME has deviated greatly from the fundamentals, the nickel price may have more room to fall under the condition of risk resolution. Generally speaking, LME will restart the transaction, indicating that the market contradiction has been alleviated and the stainless steel market has gradually recovered. However, we should pay attention to the impact of the epidemic in China in the near future.

In addition, there are many voices in the market to maintain a wait-and-see attitude towards nickel prices. “In the short term, we believe that the nickel price probability will continue to fluctuate. From the Qingshan announcement and the latest announcement of LME on resumption, the price may fluctuate violently after the opening of LME, and it is a more rational choice for Chinese investors to leave in advance. In the medium and long term, at present, the consumption prospect has slowed down significantly, the global nickel supply continues to grow, and the overseas nickel price may face a large downward trend after the settlement of the warehouse contradiction Risk. ” Shenwan futures said.

Jinyuan futures believes that in the short term, the nickel price will continue to play the game around position delivery and short selling, and the price will continue to fluctuate sharply. It will take time to observe how the downstream spot market prices and when the market returns to rationality. Therefore, it is necessary to remain on the sidelines until the market returns to rationality.

Gu Fengda, director of Guoxin futures research and consulting department, said that since the development of lunni storm, the liquidity of China’s nickel futures and spot market has recovered much earlier than that of lunni. China’s nickel and stainless steel industry chain sees that China’s futures market has strong supervision and pricing can better reflect China’s supply and demand fundamentals than overseas futures. Therefore, The impact of the subsequent storm of lunni on Shanghai nickel will be indirect and controllable, and the internal market will be more resilient than overseas.

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