Tsingshan Holding Group has secured enough credit to settle its short positions on the London Metal Exchange. The metal producer faces billions of dollars of losses as nickel prices soared over US$100,000 (635,450 yuan) a ton last week as a result of the war in Ukraine. The banks involved have agreed to give Tsingshan time to reduce its position in an orderly manner as the market stabilizes.
Tsingshan is said to have shorted 200,000 tons of nickel but most of the positions – around 70 percent – were held through over-the-counter trades with banks instead of against LME directly. The respite allows Tsinghua and its counterparties to sort things out among themselves.
“Essentially, Tsingshan will incur some losses but not as much as many might have been expected,” said ZHU Senlin, a commodities analyst at Dayue Futures. “It will be able to hold onto the positions until prices come down.”
LME resumed nickel trading on March 16 after a week-long halt, with a 15 percent price-movement limit.
