China’s Tsingshan, the world’s largest nickel producer, is planning to register an additional 50,000 metric tons of nickel cathode capacity on the London Metal Exchange (LME) in the second half of 2024, a company official announced.
This follows Tsingshan’s earlier listing of nickel cathode from its Dingxing plant on the LME in the second quarter of this year. The company now intends to apply to list 50,000 metric tons from another smelter before the end of 2024, according to Morgan Xue, Vice President of Eternal Tsingshan Group.
Tsingshan’s move is part of a broader effort by Chinese producers, who have traditionally focused on lower-grade ferronickel, to increase their production of high-grade nickel cathodes in Indonesia and China that are deliverable on the LME.
This comes after the turbulent nickel market in March 2022, which saw a sudden surge in prices and forced the LME to halt nickel trading, partly due to a shortage of deliverable nickel cathode. Sources indicated that Tsingshan was at the center of this crisis due to its large short positions on nickel at the time.
To attract more listings and restore market confidence after the nickel crisis, the LME launched a fast-track process last year to allow more nickel producers to list their brands more quickly. Since then, several Chinese producers, including Huayou, GEM, CNGR, and now Tsingshan, have applied to list their nickel on the exchange.
This increased availability of nickel cathode brands from China and Indonesia has contributed to a growing surplus in LME nickel inventories, which surged 127% in a year to 85,650 tons on Monday, putting pressure on prices.