TSINGSHAN Holding has reached agreements with two firms to swap its nickel products with a purer form of the metal to close out large short positions it holds on the London Metal Exchange (LME), Shanghai Securities News said Wednesday.

The nickel giant, which faces billions of dollars of losses from its short position, a wager that prices will fall, on the LME, needs to source nickel in a form that is accepted by the exchange for physical delivery.

The LME was forced to halt nickel trading and cancel trades after prices doubled March 8 to more than US$100,000 after Tsingshan bought large amounts to reduce its short bets on the metal, spurring a price rally fueled by the conflict in Ukraine.

The LME only accepts nickel cathodes, pellets, briquettes and rounds for physical delivery, while Tsingshan’s products nickel pig iron and nickel matte — an intermediate product that can be used in both stainless steel and batteries — cannot be traded on the exchange.

Shanghai Securities News said Tsingshan will get a combined 4,000 tons of nickel warrants from two nickel users per month for its nickel matte, without mentioning other details and names of the companies.

Tsingshan said earlier this week that it had reached an agreement with banks under which they will not close out the company’s positions or make further calls to deposit extra funds with brokers, a practice known in financial markets as margin calls. (SD-Agencies)