Nickel giant QS Holdings has slashed short positions by more than half, nickel prices continue to fall, QS has not yet carried out any delivery
Global nickel giants embroiled in an epic short-selling battle earlier this year have covered more of their short positions in recent weeks, cutting them by more than half since the crisis sent shockwaves through the nickel market.
As nickel prices fell, QS holding bought contracts from the market, trimming its short position by about 10,000 lots, or 60,000 tons, mostly in the past two weeks. They are also exploring other ways to reduce their short positions, including sourcing nickel from third parties that meet LME delivery requirements.
QS’s recent reduction of large short positions has eased the funding squeeze and the pressure on banks that agreed not to make further margin calls to the company. QS’s move is a step towards addressing the low volumes and illiquidity in the LME and nickel markets since the forced short crisis broke out.
A key metal material
Today, nickel is becoming a key metal material for the manufacturing of lithium batteries for ultra long-range electric vehicles – high-nickel ternary lithium batteries.
To further reduce short positions, QS is in talks with refined nickel suppliers about buying nickel that can be delivered to LME warehouses. Although QS is the world’s largest nickel producer, it makes a different nickel product and does not meet the LME’s requirement for delivery when short positions expire. Meanwhile, refined nickel supplies are tight, with LME warehouse stocks currently at about 73,000 tons.
QS is said to have made no deliveries yet, but talks with other suppliers are ongoing
