Money and Markets

Chinese tycoon who lost billions betting against nickel reportedly wants to keep shorting commodity

Business Insider US
A trader blows bubble gum during the opening bell at the New York Stock Exchange (NYSE) on August 1, 2019, in New York City. Johannes Eisele/AFP via Getty Images
A trader blows bubble gum during the opening bell at the New York Stock Exchange (NYSE) on August 1, 2019, in New York City. Johannes Eisele/AFP via Getty Images
  • Xiang Guangda faces billions of dollars in losses after betting against the price of nickel, but he's not yet ready to throw in the towel.
  • Guangda has told the banks his business holds its short position and that he intends to continue his bet against nickel, according to Bloomberg.
  • Nickel prices briefly topped $100,000 per ton before the London Metals Exchange halted trading.

A Chinese tycoon who faces billions of dollars in losses after betting against the price of nickel is not yet ready to throw in the towel, according to a Bloomberg report.

Xiang Guangda, owner of metals company Tsingshan Holding Group, has held a significant short bet against nickel prices and helped spark a massive 250% short-squeeze in the commodity earlier this week. Nickel prices briefly soared to more than $100,000 per ton before the London Metals Exchange halted trading in the commodity on Tuesday. 

Now, the London Metals Exchange is attempting to privately match buyers and sellers to help close out short positions before they reopen the market, in an attempt to prevent a repeated squeeze higher in nickel prices.

But Guangda wants to press his bet against the commodity and hold onto it, with the thought that the commodity's price will move lower and he won't have to realise all of the losses that he currently faces.

Guangda holds a short position to the tune of 150,000 tons of nickel, and has told the 10 banks and brokers he holds his nickel short position with that he is not yet interested in closing out his bet, Bloomberg reported citing three people with knowledge of the conversations.

That could create issues for the banks working with Guangda, which have to meet margin calls on the losing position with the London Metals Exchange. Guangda is considering pledging some of his company's Indonesian assets to satisfy the necessary collateral for the money it owes on its losing bet, according to the report.

If Guangda holds out on his short bet, it could lead to continued high volatility in the commodity, which initially spiked as Russia's invasion of Ukraine and subsequent sanctions sparked concerns of dwindling supplies.

Get the best of our site emailed to you every weekday.


Go to the Business Insider front page for more stories.

Rand - Dollar
16.78
-1.5%
Rand - Pound
20.01
-1.2%
Rand - Euro
17.09
-0.7%
Rand - Aus dollar
11.39
-1.3%
Rand - Yen
0.12
-1.5%
Gold
1,738.57
-1.5%
Silver
19.20
-0.1%
Palladium
1,921.00
-1.0%
Platinum
860.00
-1.0%
Brent Crude
102.77
-10.4%
Top 40
59,826
+1.5%
All Share
65,887
+1.3%
Resource 10
61,323
+3.1%
Industrial 25
81,232
+1.1%
Financial 15
14,367
+0.1%
All JSE data delayed by at least 15 minutes Iress logo