Short sellers cash in, markets ignore banks crisis

21 March 2023 – The markets have reacted calmly to the rescue of Credit Suisse. But the pressure that short-sellers have exerted on the market in the meantime is likely to have given them millions in profits. “Pockets of rocks” – now it seems to have hit the US financial services provider JPMorgan Chase in the case surrounding falsely declared nickel in an LME warehouse in Rotterdam. Is there more dirt hiding in the LME’s global warehouse network? And supertanker freight rates jump to over $100,000 per day – the Chinese economic engine is hungry for crude.

Short sellers cash in on Credit Suisse

As we indicated yesterday, other media have also picked up on the topic of short-sellers and the merger of the two major Swiss banks Credit Suisse and UBS. After all, it wasn’t just on Monday that it became clear that the crisis surrounding Credit Suisse had been further fueled by short sellers and was also expected to put pressure on prices in other places.

Markets shake off media-driven crisis

Even though the profits from the short sales with Credit Suisse shares were in the millions and very likely a number of other bank and financial shares were also used for this purpose, the markets have now made up for the Credit Suisse crisis and the subsequent merger with UBS and have turned back into positive territory almost everywhere.

JPMorgan Chase with pockets full of stones?

As the US news channel Fox Business with reference to a renewed incident at the commodity exchange LME currently reports, the goods declared as nickel in the Rotterdam warehouse of the LME, which turned out to be “bags of stones”, belonged to the US financial services provider JPMorgan Chase & Co.

Bounced nickel deal from Tsingshan.

JPMorgan had made a name for itself in relation to nickel, among other things, as one of the main financiers of the burst nickel deal of the Chinese Tsingshan trader Big Short. And with the financing helped push the LME into a severe crisis that has already lasted more than a year.

“After all the chaos in the nickel market, you guys deserve a little bit of this,” Thorsten Gerber, CEO of Gerber Group, commented today.

What other “stones” are lying dormant in the LME warehouses?

According to information from Fox Business, the fake nickel stocks may have been lying dormant in the warehouse for years. Even if this was not commented by JPMorgan, the legitimate question comes up, what else could be wrong with the nickel stocks at the LME? If necessary, it is time for an independent inventory.

Supertanker rates shooting up on Chinese crude demand

Shipping rates for supertankers have recently jumped to over $100,000 per day. The background to this is the massive increase in demand for crude oil from China due to the opening up of the economy following the lifting of the Corona measures.

Overall, analysts believe that the biggest demand driver and the highest demand for crude oil this year is likely to come from China.

Ships getting longer, ships running short

Market experts expect supertanker rates to remain high for the next two years. Precisely because available shipping space is in short supply and the distances to be covered are getting longer.

Russian oil needs more tankers.

At the same time, the need for tankers and supertankers to transport Russian crude oil has picked up after Russia now has to handle more of its oil exports via ships, rather than pipelines, due to Western sanctions. And rapid growth is not currently expected in the international tanker fleet.

Is China becoming the world’s economic engine again?

China is fighting to restart its economic engine after the end of the pandemic. The first signs of this are already there, looking at the high iron ore prices, the significant increase in demand for short-term consumer loans in China and the now massive demand for crude oil and supertanker capacity.

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