According to the financial Associated Press (reporter Liu Ke, Wang Bin and Qiu Hao), Chinese stainless steel giant Qingshan Holding Group Co., Ltd. (hereinafter referred to as "Qingshan holding") is experiencing the biggest crisis since the establishment of the company.

The crisis originated from the "long short" trading of the recent international nickel futures market. As of the press release on March 8, the main contract of nickel on the London Metal Exchange (LME) has broken the US $100000 mark, breaking the US $60000, 70000, 80000, 90000 and 100000 mark in a row, with a cumulative increase of 248% in the two trading days and a record high.

LME data does not disclose the names of customers, but it is widely rumored that Swiss commodity trading giants Glencore (LSE: Glen) and Castle Peak holdings are both long and short. Among them, Glencore has continued to increase its holdings of nickel futures contracts for several months, becoming a huge bull; Castle Peak holdings, due to holding a certain amount of short positions, is facing a very dangerous position explosion situation.

Qingshan holdings, headquartered in Wenzhou, Zhejiang, is extremely low-key. Its stainless steel production capacity totals 12 million tons, mainly distributed in Fujian, Zhejiang and Guangdong, Indonesia, India and Africa. The company has built Qingshan Industrial Park in Indonesia and has rich local nickel resources. According to the statistics of CSC (24.160, - 0.91, - 3.63%), Castle Peak Group has a global nickel market share of 18% in 2020.

As the high matte produced by Qingshan group is not the LME nickel delivery variety, this means that if Qingshan holdings is a short position holder, it is unlikely to choose delivery, because high matte is the raw material for the production of electrolytic nickel, and the transformation path is economical only if the high matte price is lower than the electrolytic nickel price.

On March 8, a number of nickel industry researchers told the financial Associated Press, "Due to this years interest rate cut and the production of high nickel matte, it is quite right for Qingshan holdings to bearish the nickel price in the early stage. However, the sudden change of the war situation between Russia and Ukraine has become the common fuse of the current bulk market. The market is worried that the Limited export of Russian nickel will affect the global nickel supply, resulting in the decline in the number of LME nickel deliveries, which is the primary factor contributing to the recent strength of nickel price."

Futures prices have soared, and short positions are in urgent need of additional margin. When entering the delivery month, you can choose to deliver or extend the contract, which requires a lot of cash flow investment. Many senior people in the futures industry analyzed to the financial associated press, "If the required supplementary funds are too much and cannot be added, it will be forced to close the position and bear huge losses by the exchange. If the short position of 200000 tons of Qingshan is calculated, if the price is maintained at US $80000, Qingshan holdings will spend US $16 billion. LME is to pay 12.5% of the margin, that is to say, Qingshan Holdings has paid US $2 billion of the margin. If it is forced to close the position and cannot deliver the goods, it will cost US $20 billion Billion dollars will be gone, so Castle Peaks loss is $2 billion. The current rule is that it can be postponed, that is to say, Qingshan holdings will not be forced to close its position. However, even if it is delayed for three months, or even half a year, Castle Peak can not produce 200000 tons of nickel, but no one is sure about the price fluctuation during this period. In other words, Castle Peak may be forced to close its position in the end. If the cost of shorting is $20000 per ton, it may gain or lose up to $12 billion once the position is forced to be closed. "

On the same day, a senior industry personage disclosed to the financial Associated Press, "at present, it is said that the delivery is on March 9. Glencore proposed the settlement condition that it is to sell a considerable proportion (60%) of Qingshans equity in Indonesias nickel mine, but the news has not been confirmed."

On the afternoon of March 8, the reporter of the financial Associated Press visited the Wenzhou headquarters of Qingshan holdings. The two office buildings glowed in the sun. The takeout brother and Qingshan holdings, the public opinion center of the nickel market, came in and out most frequently in the park. Under the calm appearance, the dark tide surged. After registering personal information, the staff of Qingshan holdings required that they must be received by a contact person before they can be released, and refused reporters to visit the company further.

It is worth noting that the major shareholder of Qingshan holdings is Shanghai Dingxin investment group (hereinafter referred to as "Shanghai Dingxin"), and Wenzhou businessman Xiang Guangda holds 71.5% of the shares of the former.

Qingshan holdings nickel investment in Indonesia is through Shanghai Dingxin. In 2009, Shanghai Dingxin and Indonesias local Baxing group jointly established Indonesia Sulawesi Mining Investment Co., Ltd., and Qingshan group holds 50.35% equity of the joint venture.

On the afternoon of March 8, the reporter of the financial Associated Press visited Shanghai Dingxin investment group located on Jinhai Road, Pudong New Area, Shanghai. However, after the reporter indicated his intention, the staff of the company refused to enter the company on the grounds of the need for contact connection. For the recent storm, it only means "not clear" and "not understand".

On the afternoon of August 8, the relevant person of Qingshan holdings responded to the financial Associated Press, saying, "the company continues to hold a meeting today and is sorting out relevant materials and contents. At that time, it will make a unified public response. It is uncertain whether it can respond today. As of press time, the reporter of financial associated press has not received a positive response from Qingshan holdings.

Whether Castle Peak holdings will continue to compete with bulls or close short positions is uncertain.