11 March 2022 – The Chinese nickel and stainless steel giant Tsingshan apparently had to be rescued by state intervention after it got into deep trouble due to self-inflicted losses. Spanish steel mills reduce production. EC imposes anti-dumping duties on Chinese aluminium imports. And nickel trading remains suspended.
Nickel: Tsingshan had to be rescued by the state
According to market calculations, Tsingshan has lost at least 8 billion US dollars due to the turmoil on the nickel market. However, Xiang Guangda, the owner of Tsingshan Holding Group Co. apparently still wants to hold on to his nickel short positions of about 150,000 MT. And also tried to convince his lenders and banks to support this.
Banks urged by government to grant credit lines
According to current information, however, the nickel and stainless steel giant Tsingshan had to be rescued by government intervention from the Chinese side. It is reported that banks were urged by the Chinese government to give more credit lines to the company, which was badly hit by failed nickel speculations.
Where will the nickel come from?
It is interesting to note that the Tsingshan Group does not produce the nickel traded on the LME and SHFE itself. The big question is how to procure it from its own non-existent production.
Spanish steel producers cut production
The largest Spanish steel producers have announced that they will cut back their production due to the sharp rise in energy costs. Other parts of the EU, such as Germany and Switzerland, are also reporting that steel mills will have to reduce their production.
EC: Anti-dumping duties of up to 30% on Chinese aluminium foil
The European Commission (EC) has imposed anti-dumping duties of 6.4% to 30% on certain aluminium foil originating in China, effective 10 March 2022. At the same time, following two previous anti-circumvention investigations, the EC has not only extended the scope of the aluminium products concerned from one HS code to eight HS codes, but has also extended the measure to aluminium foil from Thailand.
Chinese aluminium producers had tried to ship their products to the European Union via Thailand in order to circumvent the European anti-dumping measures.
Nickel trading still suspended
Nickel trading on the LME remained suspended at 8:00 GMT. Nickel contracts on the SHFE for the same period are also suspended. The last official update on the LME website is currently dated 10 March 2022.
- Europe’s aluminium industry under pressure
- Tsingshan again, speculation costs group at least $8 billion
- Suspension of LME Nickel Market
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