China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
The London Metal Exchange (LME) is hiking initial margins by 28% on nickel, which the exchange has targeted for heightened monitoring due to heavy volatility in recent days.
A notice released on Wednesday said the initial margin for nickel would climb to $6,100 a tonne effective after close of business on Friday, from $4,765 previously.
The LME, the world’s oldest and largest market for industrial metals, said on Wednesday it would undertake enhanced monitoring of nickel after it fell as much as 12%, having already breached the LME’s 15% daily limit on price swings on Monday.
Benchmark three-month nickel extended losses on Thursday, slipping an additional 6.2% to $15,840 a tonne by 1420 GMT.
Margins for other metals will also increase, including copper by 6.3% and aluminum by 9.2%.
Margin calls are deposits of cash or collateral with the exchange’s clearing house, LME Clear, to cover potential losses if a member defaults.
Members must deposit the initial margin with LME Clear when opening their trades.
The exchange is owned by Hong Kong Exchanges and Clearing Ltd.
(By Eric Onstad and Pratima Desai; Editing by Kirsten Donovan)
Comments