Chinese tycoon Xiang Guangda behind big nickel short facing losses worth billions of dollars

A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after this week’s unprecedented price spike, according to people familiar with the matter.

Xiang Guangda, who controls the world’s largest nickel producer, Tsingshan Holding Group, and is known as “Big Shot” in Chinese commodity circles, has closed out part of his company’s short position and is considering whether to exit the wager altogether, the people said.

Nickel rocketed to a record high above US$100,000 a tonne on Tuesday, driven in part by Tsingshan and its brokers’ activity, before trading was suspended.

While the exact scale of Xiang’s losses is unclear, Tsingshan’s short position on the London Metal Exchange (LME) is in the region of 100,000 tonnes of nickel, people familiar with the matter said. It could be even larger than that when positions taken through intermediaries are taken into account, people separately said. That means it would have suffered well over US$2 billion of daily losses at the most extreme point of nickel’s surge on Monday.

That would come on top of any losses incurred by the tycoon since he began building the short position late last year through closely held Tsingshan.