Nickel and iron production company Nickel Mines (OTCMKTS:NICMF) is down today following Tuesday’s massive dropoff. NICMF stock nearly lost 23% of its share value on Tuesday before trading was halted. Despite nickel soaring to over $100,000 a ton this week, investors were preoccupied by other factors related to NICMF.
What’s going on with Nickel Mines lately?
Today, NICMF is down roughly 8% so far, marking a consecutive day of major losses for the company. The Australia-based mining company is likely falling from reports related to Chinese business partner Tsingshan Holding Group. Tsingshan is one of the world’s top producers of nickel and has long held a stake in Nickel Mines. Apparently, the chairman of Tsingshan is facing billions in losses due to a short position held on LME nickel.
Investors were clearly spooked by the report and the implications for the greater nickel market. So, what else do you need to know about Nickel Mines today?
NICMF Stock Avoids Selloff as Tsingshan Faces Potential Major Losses
It’s odd that, as the price of nickel approaches all-time highs, a company known for its nickel production could suffer as a consequence. Nonetheless, this appears to be exactly what’s happening with NICMF stock as investors reel over the Tsingshan short position on nickel futures.
Still, Nickel Mines was able to avoid a further selloff by assuring investors of the company’s rigidity despite Tsingshan’s potential tumble.
“Tsingshan have firmly assured the Company that they have no intention of selling any shares that it holds in the Company […] Tsingshan’s operations remain robust and unaffected with the Group having strong confidence in its ability to manage its current market position.”
So, NICMF was able to limit the losses on Tuesday despite the initial drop. Chinese tycoon Xiang Guangda — who largely operates Tsingshan — has also already closed out part of the company’s short position.
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On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
