China’s Influence Over Metals Trading Creates Advantage for Its Domestic Enterprises

The London Metal Exchange suspended nickel trading because of the Tsingshan (THG) nickel incident, the first time since 1985 that the LME has suspended trading in a metal, in London, on March 8, 2022. The graph shows the one-day rise and fall of nickel prices on the London Stock Exchange. Ben Stansall/AFP

Commentary

Chinese stainless steel giant Tsingshan Holding Group (THG) has relied for many years on short selling to reduce its future costs for nickel, a key component of stainless steel and a major ingredient in lithium-ion batteries. But rather than nickel prices falling as hoped, the price skyrocketed to more than $100,000 per ton on March 8, one day before THG’s 200,000-ton short sell contract was due on March 9.