Chinese tycoon Xiang Guangda has to find a way to bail his Tsingshan Holding Group out of a crisis after its bet on nickel prices backfired, fuelling more volatility in a metal essential for the electric vehicles industry.
Beijing could step in to rescue Tsingshan, a source familiar with the matter told Reuters. China could swap some of its high grade nickel reserves for low grade nickel pig iron that Tsingshan produces to help it meet LME quality standards. China is estimated to hold around 100,000 tonnes of nickel in state stocks, two analysts said.Tsingshan has figured in market swings before.
"Markets were sensing that were going to make a move, but they probably made it too early ... a quarter or so too early and nobody was anticipating what happened in Ukraine," said Angela Durrant, Wood Mackenzie's principal nickel analyst."Foreigners do have some actions and we are actively coordinating [with related parties]," China Business News quoted Xiang as saying on March 8.
"Government has ambition in Indonesia, they want to build the hub for battery for electrical car. That's why you see the policy to support the industry," the source said."We are affected by COVID, but not affected by this ." But its fortunes changed when Xiang, 64, started exploring Indonesian markets in 2009. Over the next decade, it shook the global nickel industry with low-cost nickel pig iron.
"There was nothing there on that site in 2015 ... so they did something absolutely miraculous," Durrant said."Getting away from higher Chinese power , moving everything over to Indonesia was a masterstroke for them."He became known as a market disruptor who could"take the world by storm", said Steven Brown, an independent nickel consultant in Canberra who spent two days touring Tsingshan’s production facilities with Xiang in 2014.
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