The price of nickel was going up with the Ukraine-Russian conflict because of supply concerns since Russia produces 17% of the world’s top-grade nickel.
On Tuesday, though, the supply fears and the US and the UK’s new sanctions pushed the price past a record US$100,000 per ton, doubling where it was just days ago.
This led the London Metal Exchange (LME) to suspend nickel trading to let things settle down, and the Shanghai Metal Exchange raised nickel trading fees. So now brokers and one billionaire (Xiang Guangda) who put a huge bet on the price of nickel going down are potentially going to see massive losses.
“We’ve received a lot of phone calls today. Tsingshan is an excellent Chinese enterprise, and our positions and operations don’t have any problems,” said billionaire Xiang to Chinese news outlet Yicai.
“It is a very dangerous market right now because this is a market that is not driven by supply and demand, it is driven by fear,” Saxo Bank’s Ole Hansen told CNBC’S “Squawk Box Europe” on Tuesday.
“The LME will actively plan for the reopening of the nickel market, and will announce the mechanics of this to the market as soon as possible,” said the London Metal Exchange in a statement.