LME Cancels a day of trades on Nickel

[D5CAV]

They should have just halted the exchange when Nickel hit $50,000, but no: https://www.mining.com/lme-cancels-nick ... 0-a-tonne/

They let trading continue, then cancelled 5,000 trades, representing $4 billion in transactions that would have created profits of $1.3 billion for the winning traders and losses of $1.3 billion for the losing traders.

The 145-year-old exchange responded by halting trade, and in a later update announced the cancellation of all trades and deferring delivery of all physically settled contracts. The contract was suspended at $80,000 per tonne.

Instead of acting as a neutral trading house, the LME stepped in to pick winners and losers.

So who were the winners when LME cancelled those trades?

According to the Wall Street Journal quoting Chinese media, Xiang is in for a potential $8 billion hit in order to cover his position:

Who is Mr. Xiang? He owns Tsingshan Holdings

Bloomberg reports Chinese entrepreneur Xiang Guangda – known as “Big Shot” – has for months held a large short position on the LME through his company Tsingshan Holding Group Co, the world’s largest nickel and stainless steel producer.

I mentioned in another thread that Russia is one of the largest producers of Nickel, but the largest is Indonesia.

So what happened to all those USD you spent on stuff from Walmart and Amazon? Do you think china.gov spent them all on hookers and blow?

Nope, they put those USD into a Chinese SOE (State Owned Entity) called China Construction Bank. CCB is the biggest financier of Mr. Xiang's Tsingshan Holdings.

Those USD were used by Mr. Xiang to buy many of Indonesia's largest Nickel mines.

And what firm owns the LME in London?

That would be another Chinese SOE called Hong Kong Exchange and Clearing.

After announcing the unprecedented action of cancelling a days trading, LME CEO Matthew Chamberlain said that the LME's owners had no impact on the decision.

[D5CAV]

Last week it was nickel. This week it is oil: https://www.zerohedge.com/markets/tradi ... -cfo-warns

However, unlike Tsingshan Holdings, which actually owns nickel mines, Trafigura doesn't own any oil fields. So they can't propose a "workout plan" where someone steps forward to cover their position (for a fee) while they pump the oil out of the ground.

Of course the CFO of Trafigura is playing the "too big to fail card" for his firm:

So just to make sure that the message is heard loud and clear, Salmon said that if the commodity traders go down, they will drag the rest of the world with them, and that "ruptures to commodity financing would feed through to consumers."

“We are already in a vicious cycle on the futures market. I want to stress the impact that it will have on the physical market," he said.

Yeah, so he gets underwater on some of his trades, so "we" have to bail him out.

Where was the "we" when they were distributing those partnership profits?

When do "we" get fed-up enough with this that "we" start throwing ropes over streetlamps?