A Chinese investor is facing billions in losses after a historic surge in the price of nickel led the London Metals Exchange to temporarily cease trading.
The nickel market bounced under expectations that growing sanctions on Russia, a significant commodities exporter, would increase the price of the precious metal.
A number of big players sought to close their short positions in Nickel, leading to a mammoth short squeeze that drove up prices more than 110% and past $100,000 a tonne.
Chinese tycoon Xiang Guangda, known as “Big Shot”, had held a massive short position on nickel, according to Bloomberg, and is now under pressure from brokers to make margin call collateral payments to show he can cover potentially billions of dollars in losses.
Nickel trading on the LME remains suspended after record rises to the commodity, which gave up some gains as it fell back to US$82,000 a tonne before the suspension.
“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” the LME said in a statement.