Today, Fat Brother read a lot of comments about Qingshan Futures news, and I feel that many people are not very clear about futures delivery. I will try to explain it with my personal understanding and see if I can explain it clearly.

Today, Fat Brother read a lot of comments about Qingshan Futures News. I feel that many people are not very clear about futures delivery . I will try to explain it with my personal understanding and see if I can explain it clearly.

Tsingshan Group bought a short order of 200,000 tons of nickel at a price of US$20,000. According to the margin of LME nickel, it is 50% of the total price, which means that Tsingshan Group paid a deposit of US$2 billion. LME Nickel closed on March 7 The price is US$70,000 per ton. Now Tsingshan Group has two options. One is to close the position. According to the futures price of US$70,000 on March 7, it is equivalent to the price difference of US$50,000 per ton that Tsingshan Group needs to pay, which is also It means that 10 billion US dollars is out, and Tsingshan Group loses blood. The second is spot delivery. Currently, Tsingshan Group has 200,000 tons of nickel spot. Assuming that the nickel delivery price agreed between Tsingshan Group and the bulls is US$35,000 per ton, then US$15,000 will be deducted from Tsingshan Group’s margin on the LME exchange during delivery. Based on the spot futures price difference, the futures account will lose about (15,000*200,000 tons) US$3 billion. However, because Tsingshan Group itself is a nickel manufacturer, the cost of nickel is about US$10,000 per ton. At US$35,000 per ton, After selling 200,000 tons of nickel, there will be an income of US$5 billion after deducting the cost, and then subtracting the loss in the futures account. In fact, Tsingshan Group will earn US$2 billion. If Tsingshan Group’s nickel is obtained from the State Reserve, it is estimated that If this profit is handed over to the State Reserve, in short, Tsingshan Group will not lose money on futures delivery.

Now let’s talk about the situation of the bulls. Assuming that the price of the long orders is US$100,000 per ton, and the long orders of 200,000 tons are purchased, then the futures account will have US$13 billion in spot at the first delivery. The futures price difference is lost, and the second physical delivery requires Tsingshan Group’s nickel spot payment of US$7 billion. If the bulls can sell 200,000 tons of nickel at a price of 35,000 tons, then the final loss of the bulls will be locked at US$13 billion [down], but if 200,000 tons of nickel have to be sold at the same time, the spot price will most likely be lower than US$35,000 per ton. , then the final losses of many parties should exceed US$13 billion. From the conclusion, the LME Exchange's cancellation of all long and short transactions on March 8 is completely to save the long parties instead of Qingshan Holdings . According to the closing price of LME nickel futures on March 7, the futures price is US$70,000 per ton. price, the losses of many parties will be controlled at US$7 billion.

Finally, the above interpretation is only my personal opinion. If you have any questions, you are welcome to correct me.