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Next China: Nickel’s Big Short

A Tsingshan Holding Group Co.’s office in Shanghai, China, on March 10.

A Tsingshan Holding Group Co.’s office in Shanghai, China, on March 10.

Photographer: Qilai Shen/Bloomberg

Until recently, Chinese tycoon Xiang Guangda was little known outside commodity circles.

Not anymore.

When nickel spiked to a record of over $100,000 a ton, Xiang — known as "Big Shot" by metals traders — suffered billions of dollars in potential losses. The problem? His company’s massive short in metal futures.

Tsingshan Holding Group Co.’s losses embroiled one of the country’s largest banks and forced the London Metal Exchange to take the unprecedented step of suspending the market and canceling nickel trades in Asia hours. Trading on the LME won't resume any earlier than Friday.