Zhao Chen stood up and walked to the window, looking at the skyline Manhattan outside the window.
In the distance is Hudson River, and a ferry is slowly passing by on the river, leaving a white trail.
Shen Zhiyi walked next to him without speaking.
Su Wantang refilled the tea cup and placed it on the window sill. The three people stood in front of the window, looking at the same sky.
Zhao Chen suddenly remembered something. He turned his head and looked at Lin Shicheng.
"Is there any preliminary feedback from LME Nickel Plate?"
"Yes. And it's more complicated than I expected."
Lin Shicheng opened the third folder, which contained a stack of printed information. Each page was marked with red and blue pencils.
"I spent three days dismantling the LME's nickel delivery rules from beginning to end.
Let's talk about the most core one first – the grade standards for LME nickel delivery."
He pushed the first page in front of Zhao Chen.
"The delivery object of the LME nickel contract must be refined nickel, and there are two grade standards.
One is the ASTM B39-79 (2013) specification of American Society for Testing and Materials, the nickel content is not less than 99.8%.
The second is the Ni9990 grade of China national standard GB/T 6516-2010, the total content of nickel and cobalt is not less than 99.9%.
The shape only accepts cathode nickel, which can be a full plate or a cut plate, or it can be pressed into nickel blocks, nickel shots or nickel balls.
The upper size limit for full-plate nickel cathodes is one thousand millimeters by one thousand four hundred millimeters, and the thickness ranges from two millimeters to seventeen millimeters.
The delivery volume of each warehouse receipt is six tons, which is allowed to fluctuate by 2%.
The warehouse receipt must indicate the brand name, country of origin, shape, certificate of analysis number, total gross and net weight, and the number of drums or bales.
Each warehouse receipt must also carry a barcode generated by the LMEsword system."
Zhao Chen Read the grade standards page carefully.
Minimum purity of 99.8 percent, size limit for full plate cathode nickel, standard delivery unit of six tons per warehouse receipt--
These are hard physical thresholds without any room for flexibility.
"How much production capacity in the world meets this standard?"
"That's the heart of the matter."
Lin Shicheng Open the second page.
"The LME currently approves a total of twenty-one delivery brands from eleven countries.
The global primary nickel production capacity covered by these 21 brands is approximately 500,000 tons.
But there is a key structural problem here - most of the primary nickel production capacity has been locked in long-term contracts.
The top five nickel producers in the world are Russia Norilsk, Brazilian Vale, China Jinchuan, Glencore and BHP,
The estimated total nickel production of these five companies this year accounts for 35.4% of global production, and the nickel plate production capacity that meets LME delivery standards is particularly concentrated."
He drew a simple production capacity distribution map on paper.
"Norilsk is the largest nickel delivery brand on the LME.
It owns multiple full plate cathode nickel brands such as Norilsk Combine H-1 and Severonickel Combine H-1.
The expected nickel production of Polar Division and Kola MMC this year totals 172,000 tons.
Most of them are full plate cathode nickel that meets LME delivery standards.
But these outputs have been locked by long-term traders of Europe and China.
Russian Nickel is expected to export 51,800 tons to China this year, all of which are under long-term contracts.
Jinchuan Group is China's only large-scale nickel producer with a delivery brand registered on the LME, with an annual production capacity of approximately 150,000 tons.
However, the premium of Jinchuan nickel in the domestic market has been higher than the LME benchmark price for a long time because the rigid demand from the domestic electroplating and alloy industry has always been strong.
Most of the output is directly supplied to domestic long-term cooperative customers, and the free circulation volume that can enter the LME warehouse is extremely limited."
Lin Shicheng put down the pen and his tone became deeper.
"Nickel plate that meets LME delivery standards, global free circulation--
That is, Spot that is not locked by the long-term cooperation agreement-it is estimated that it does not exceed 100,000 to 150,000 tons per year.
We have to stockpile 200,000 tons within 12 to 18 months, which means that we have to eat up the world's free circulation for one and a half years.
If this volume is exposed, the nickel price will be pushed up during the process of building our position."
Zhao Chen's fingers slowly circled around the edge of the tea cup. "Where is the delivery location?"
"The LME's registered warehouse network covers 33 locations around the world and more than 450 approved warehousing facilities.
The main delivery warehouses of nickel are concentrated in Asia and Europe, Asia is dominated by Singapore, Busan, Kaohsiung, and Gwangyang, and Europe is dominated by Rotterdam."
He turned to the next page of the inventory distribution table,
"As of this month, the LME nickel inventory totals approximately 240,000 tons, of which Singapore and Rotterdam are the two largest delivery hubs.
The nickel inventory in the Singapore warehouse is more than 80,000 tons, Rotterdam is about 30,000 tons, and Busan and Kaohsiung each have more than 60,000 tons.
But these inventories have a fatal structural problem - nickel plates account for a very low proportion of the total LME inventories, and most of them are nickel beans."
Zhao Chen's eyes fell on the column of inventory structure.
He doesn't need Lin Shicheng to explain the difference between nickel beans and nickel plates--
Although nickel beans can also be used for delivery, in actual industrial applications, nickel plates are the main raw material in the electroplating, alloy and special steel industries.
The liquidity and downstream acceptance of nickel beans are much lower than that of nickel plates.
"So the LME's nickel plate inventory is actually much lower than the total inventory number gives the impression."
"Yes. This year's LME nickel plate inventory accounts for less than 20% of registered warehouse receipts, and the absolute amount is only about 40,000 tons at most.
Most of the inventory is nickel beans, concentrated in the Asia warehouse, which mainly meets the delivery needs of nickel beans in the China stainless steel and battery industries.
For qualified nickel plates that can truly be used for physical delivery, the explicit inventory in LME registered warehouses is far less than the number seen in the market.
If we want to store 200,000 tons - it doesn't have to be placed in the LME warehouse, we can store it outside the warehouse, as long as it meets the delivery standards.
You can register it as a warehouse receipt at any time when the market needs it.
But the problem is the same: there is only so much nickel plate production capacity that meets standards in the world, and the free circulation is only so large.
What we need to do is not to buy nickel plates from LME warehouses, but to lock Spot from manufacturers and traders.
There simply isn't enough qualified nickel plate on the market to meet delivery demand."
Zhao Chen Close the folder and lean on the back of the chair.
Su Wantang put the refilled tea in his hand, Shen Zhiyi raised his head from the computer, and his eyes fell on the pile of densely marked information in front of Lin Shicheng.
"Lawyer Lin, you just said that the nickel plate inventory in the LME warehouse is only 40,000 tons.
If we start from both the Spot market and manufacturers at the same time, and stockpile 200,000 tons in 12 to 18 months - how can we break this rhythm?"
Lin Shicheng turned to the last page, which showed the timetable for opening a position that he had drafted.
"In three stages.
Phase One, through Offshore SPV, gradually absorbs qualified nickel plates in circulation in the Spot market, and controls them at 5,000 to 8,000 tons per month, without affecting the balance of market supply and demand.
At the same time, contact the traders of Jinchuan and Norilsk and strive to sign long-term agreements to increase the amount.
Phase Two, deploy warehouse Energy Storage force near the LME registered warehouse, and gradually transfer the accumulated nickel plates to a location where they can be quickly registered as warehouse receipts.
Phase Three, when the market begins to show signs of tight supply, slow down the pace of position building and let the market push up prices on its own.
The entire warehouse building cycle has been extended to eighteen months, and the total investment is approximately between 24 and 3 billion US Dollar."
Zhao Chen drew a horizontal line on the timetable.
"Phase One will do it first, and the rhythm of five thousand to eight thousand tons per month will remain unchanged.
Negotiate long-term agreements with Jinchuan and Norilsk in person, not through an intermediary.
Phase Two wait until Phase One runs for three months and then check the rhythm. Also--"
He pushed the timetable back to Lin Shicheng,
"You should make a separate budget for the storage fees, insurance fees and delivery certification fees at the LME warehouse.
This money cannot be saved, and the nickel plate is incurring costs every day it is in the warehouse."
Lin Shicheng responded and put the folder away.
Era Vanguard's office has resumed its operating rhythm--
Lin Shicheng started drafting the implementation plan for nickel plate position Phase One on the computer.
Shen Zhiyi moved the computer to the workstation by the window and continued to deal with legal docking matters. Su Wantang sent an email to the domestic Philanthropic Foundation team to confirm the remote coordination process.
Zhao Chen sat back at the conference table, opened the GME position details, and drew a horizontal line with a pencil under the row of Common Stock's position.
One percent, the average price for opening a position is six US Dollar.
Ryan Cohen's average price is 8.43, and DFV's average price is 5 US Dollar.
These three lines are on the same coordinate axis and have not yet intersected, but they have begun to approach.