New turmoil on the nickel market?
New turmoil on the nickel market?

25 October 2022 – Does the Chinese nickel and stainless steel giant Tsingshan want to return to the LME and become more active in nickel trading? Russian raw materials alliance faces a test of strength. And the European Union is upset about new US subsidies.

New turmoil on the nickel market?

According to media reports, Xiang Guangda’s Tsingshan Holding Group Co. wants to re-enter nickel trading on the London Metal Exchange. After the failed billion-dollar nickel deal in March 2022, however, many brokers seem to be giving the Chinese stainless steel group the cold shoulder and refusing to cooperate. And neither LME officials, Tsingshan nor JPMorgan bankers were willing to comment, according to media.

Not the first conspicuity

“The definition of insanity is always doing the same thing and expecting different results,” Thorsten Gerber, CEO Gerber Group, quoted scientist Albert Einstein today in reference to the news. “Perhaps one should once again become aware of this. And not to give such market participants too much room for manoeuvre. After all, this was not the first time that there have been conspicuous events with regard to the aforementioned players. We only have to look back to February and March 2021,” Thorsten Gerber continued.

Is the Russian commodity alliance bursting?

The Russian commodity giants Norilsk Nickel and Rusal are at odds over a dividend agreement concluded ten years ago. This has already led to several disputes between the two groups and thwarted a possible merger. Now Rusal has filed a lawsuit against Norilsk Nickel in the United Kingdom to avert further damage to shareholders, according to the group.

If Rusal were to break its ties with Norilsk Nickel, it could put Russia’s biggest platinum and nickel producer in trouble. Important investment projects could or might even have to be postponed. This could also have an impact on Russian nickel production.

US-EU: Steel friendship already rusting?

Even if it seemed that under President Biden the restrictions in the steel business with the European Union might ease, the new steel alliance may already have become rusty in some places.

New dispute: EU sees itself at a disadvantage

For there is a new dispute between Europe and the United States. Especially regarding new US subsidies for electric vehicles built in the United States. France, which holds the EU Council Presidency until the end of June 2022 and has focused on market protection measures during this time, is furious about the new US rules and is now demanding countermeasures from the EU.

Tense negotiations in the Trade and Tech Council?

This could have tensions and repercussions for further negotiations in the Trade and Tech Council, which so far, and not only in our opinion, has not been much more than a glorified round of talks.

Whether more can be achieved in the future than a European tariff rate quota for steel imports into the USA? It remains to be seen.

Chinese economy grows stronger than expected

The Chinese economy grew much more strongly in the third quarter of 2022 than analysts had expected. According to the Chinese National Bureau of Statistics, gross domestic product rose by 3.9% in the period from July to September.

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