Nickel Miner With Tsingshan Ties Sinks 23% Before Trading Paused


(Bloomberg) — An Australian nickel miner with ties to Tsingshan Holding Group Co., the world’s top producer of the material, resumed trading after an earlier plunge triggered a pause within an hour of morning trading in Sydney.

Nickel Mines Ltd. closed closed 4.8% lower, trimming losses as much as 23% in its biggest drop since August 2018. The volatility follows a report that the chairman of China’s Tsingshan – which has a subsidiary doing business with the Australia nickel miner – is said to be facing billions of dollars in potential losses after its massive short position.

The Sydney-based company acknowledged media speculation “regarding a short position in LME nickel held by Tsingshan” and the implications that had for the nickel market, in response to a query from the Australian Securities Exchange.

Tsingshan has assured it has no intention of selling any shares it holds in the company, Nickel Mines said in a statement. “Tsingshan’s operations remain robust and unaffected,” the Australian firm added, saying its own projects were also unaffected.

Nickel soared to a record high above $100,000 a ton on Tuesday, driven in part by Tsingshan and its brokers’ activity, before trading was suspended. Chinese tycoon Xiang Guangda, who controls Tsingshan, closed out part of his company’s short position and is considering whether to exit the wager altogether, according to people familiar with the matter.

Metal Traders Reel as Nickel Chaos Recalls Market’s Darkest Days

Shares of other Asian names with ties to Tsingshan also tumbled on Wednesday, with Zhejiang Huayou Cobalt Co. falling by the 10% limit. GEM Co., China Molybdenum Co. and CNGR Advanced Material Co. each fell by more than 5%.

Tsingshan subsidiary Shanghai Decent holds a 6.2% stake in Nickel Mines, according to the company’s website. Nickel Mines in November agreed to expand its partnership with Shanghai Decent, including the acquisition of a 70% stake in the Oracle Nickel project in Indonesia.

©2022 Bloomberg L.P.

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