OPEC for Nickel, page-14

Tsingshan agreeing to take all of NIC's production is a pretty worthless agreement unless it is at a fixed long term price which it is not. At best it is priced at the spot price or a margin above/below the spot price.

None of this should be a big surprise:

• Tsingshan makes stainless steel and benefits from a lower Nickel price.
• Tsingshan has been busy building increased Nickel production capacity but has been retaining only a portion of equity holdings of that production
• Tsingshan famously was shorting the Nickel price but got it's timing slightly off. Still is exposed their expectations.

It is in the interest of an upstream producer that depends on the supply of a low value commodity to encourage excess supply of their low value commodity. And that is exactly what Tsingshan has done.

This isn't exactly a new game in town:
https://www.copyright link/companies/mining/china-pumps-another-billion-dollars-into-australian-iron-ore-20220914-p5bhxa

So as much as I've been a NIC believer, I haven't been naïve to Tsingshan's motives. They aren't in the game to make money in Nickel, they are in the game to make money in stainless steel and make a buck or two building the supply capacity.


So where does this leave NIC? Exactly where they've always been. A low cost nickel producer in a market that is trending towards excess supply in the near term. That excess supply storm is now hitting, but NIC is better placed than legacy Nickel producers to weather that storm.