CHINA’S Tsingshan Holding Group bought large amounts of nickel to reduce its short bets on the metal and its exposure to costly margin calls, turbocharging a record rally fuelled by the conflict in Ukraine, three sources familiar with the matter said. One of the world’s biggest nickel and stainless steel producers, Tsingshan started building a short position, a wager that prices will fall, in the nickel market last year. The war in Ukraine and the west’s moves to sanction Russia, a key major supplier, have electrified an already bullish nickel market. Prices doubled to a record above US$100,000 per ton in a matter of hours Tuesday, prompting the London Metal Exchange (LME) to halt trading. It is up nearly 400 percent so far this year. The price moves exacerbated the pressure on holders of big short positions, already facing calls to deposit extra funds with brokers, a practice known in financial markets as margin calls. Tsingshan, a privately-held company, and other “shorts” faced larger margin calls on their short bets after the LME raised the amount of money companies had to deposit with it to cover their exposure to falling nickel prices, the three sources said. Tsingshan and the LME declined to comment yesterday. One of the sources said Tsingshan’s bets on lower nickel prices had amounted to around 300,000 tons at an average price between US$18,000 and US$19,000 a ton. Prices for the metal, used in stainless steel and electric vehicle batteries, were last in that range in December. The LME announced Friday it was raising margin requirements for nickel contracts by 12.5 percent to US$2,250 a ton. The extra charge kicks in at close of business Tuesday. At US$2,250 a ton, the capital required on 300,000 tons of nickel would be US$675 million, according to calculations. Late Monday, the LME also allowed traders to defer delivery obligations on all its main contracts, including nickel, an unusual step that underscores the pressure on commodities generally from the moves to isolate Russia economically. (SD-Agencies) | 