Risk Management Analysis—A Case Study of Tsingshan Nickel Incident
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Risk Management Analysis—A Case Study of Tsingshan Nickel Incident

Xiaole Tang 1* Ziwei Wang 2, Jiali Guo 3
1 Nanjing Foreign Language School
2 Brandeis University
3 Shanghai Nord Anglia Chinese International School
*Corresponding author: tang_xiao_le@163.com
Published on 9 September 2025
Journal Cover
AEMPS Vol.213
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-351-2
ISBN (Online): 978-1-80590-352-9
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Abstract

This study takes a close look at why Tsingshan Group decided to take a large short position in the London Metal Exchange (LME) nickel market. We examine the several factors that influenced their strategy. And explore the reasons behind Tsingshan's failure. In particular, we discuss the size of their shot position in light of the difficulties they have encountered in reducing their positions quickly. The paper also analyzes Tsingshan's OTC trading activities and how they contributed to the crisis. Additionally, it discusses the strategies Tsingshan used to survive the crisis and compares their approach to other companies that have either succeeded or failed in short selling. It highlights the similarities that led to misjudgment and inadequate LME regulation while also looking at the unique factors that helped Tsingshan avoid disaster.

Keywords:

Tsingshan, short, risk

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Tang,X.;Wang,Z.;Guo,J. (2025). Risk Management Analysis—A Case Study of Tsingshan Nickel Incident. Advances in Economics, Management and Political Sciences,213,36-47.

References

[1]. Liu, Y., Sun, Y., Wang, J., Li, S., & Yao, Y. (2022, December 27). Risk Management Analysis and Reset Strategy of High-risk Financial Derivatives - A Case Study of Tsingshan Nickel Incident. Www.atlantis-Press.com; Atlantis Press. https: //doi.org/10.2991/978-94-6463-098-5_77

[2]. Russia nickel mine production 2020. (n.d.). Statista. https: //www.statista.com/statistics/260770/russias-mine-production-of-nickel-since-2006/

[3]. Fizaine, F. (2015). Modeling the copper market: A toolbox for decision making in the short term. Minerals & Energy, 30(2), 20-33. doi: 10.1080/14041040.2015.1065290

[4]. Dong, N., Wang, J., & Yang, Y. (2022). Study of Speculative Trading Risks Based on Example of Short Squeezing. In Y. Jiang (Ed.), ICEDBC 2022, AEBMR 225 (pp. 1230-1236). Atlantis Press. https: //doi.org/10.2991/978-94-6463-036-7_182

[5]. Liu, J. (2024). Case Analysis and Future Expectations of Chinese Enterprises Suffering Heavy Losses in the International Futures Market: Take the Bank of China and Tsingshan LME as Examples. In SHS Web of Conferences (Vol. 188, p. 02012). EDP Sciences.

[6]. National Business Daily. (2022) “Tsingshan’s nickel 'thrilling 48 hours’: who is closing in on the epic surge? Hedging or gambling?”. https: //xw.qq.com/cmsid/20220313A08G7800

[7]. Eric Onstad (2022) LME imposes price limits for the first time after nickel crisis https: //www.reuters.com/business/lme-imposes-price-limits-first-time-after-nickel-crisis-2022-03-15/

[8]. Li, S., & Nadeem, M. (2010). Risk Management and Internal Control: A case study of China Aviation Oil Corporation Ltd.

[9]. Dyer, G. (2005). China makes habit of losses on commodity markets: LONDON 1ST EDITION. The Financial Times (London Ed.).

[10]. Liu, C. (2022, July 16). Tsinghua study on the impacts of digital transformation on Chinese enterprises. Fortune China. Retrieved from https: //www.fortunechina.com/shangye/c/2022-07/16/content_415340.htm

[11]. Ge, Z., Liu, J., & Pan, X. (2023). An analysis of Tsingshan Holdings Group's short-selling strategy and its failures. Journal of Financial Markets and Derivatives, 19(3), 101-120. doi: 10.1016/j.finmar.2023.05.002

[12]. Yeo, A. (2014). Sliding down a Slippery Slope: The US$550m Derivative Trading Loss of November 2004. INSEAD.

[13]. Kurien, D. (2005). Commodities Report: China may quietly cover short position in copper; Similarity to 1997 crisis leads some to speculate Beijing may step in again. The Wall Street Journal Asia.

[14]. C. Valvi, A., & C. Fragkos, K. (2013). Crisis communication strategies: A case of British Petroleum. Industrial and Commercial Training, 45(7), 383-391.

[15]. Manna, D. R., Marco, G., Khalil, B. L., & Esola, C. (2011). Sustainable markets: Case study of Heinz. Journal of Business Case Studies (JBCS), 7(5), 35-42.

References

[1]. Liu, Y., Sun, Y., Wang, J., Li, S., & Yao, Y. (2022, December 27). Risk Management Analysis and Reset Strategy of High-risk Financial Derivatives - A Case Study of Tsingshan Nickel Incident. Www.atlantis-Press.com; Atlantis Press. https: //doi.org/10.2991/978-94-6463-098-5_77

[2]. Russia nickel mine production 2020. (n.d.). Statista. https: //www.statista.com/statistics/260770/russias-mine-production-of-nickel-since-2006/

[3]. Fizaine, F. (2015). Modeling the copper market: A toolbox for decision making in the short term. Minerals & Energy, 30(2), 20-33. doi: 10.1080/14041040.2015.1065290

[4]. Dong, N., Wang, J., & Yang, Y. (2022). Study of Speculative Trading Risks Based on Example of Short Squeezing. In Y. Jiang (Ed.), ICEDBC 2022, AEBMR 225 (pp. 1230-1236). Atlantis Press. https: //doi.org/10.2991/978-94-6463-036-7_182

[5]. Liu, J. (2024). Case Analysis and Future Expectations of Chinese Enterprises Suffering Heavy Losses in the International Futures Market: Take the Bank of China and Tsingshan LME as Examples. In SHS Web of Conferences (Vol. 188, p. 02012). EDP Sciences.

[6]. National Business Daily. (2022) “Tsingshan’s nickel 'thrilling 48 hours’: who is closing in on the epic surge? Hedging or gambling?”. https: //xw.qq.com/cmsid/20220313A08G7800

[7]. Eric Onstad (2022) LME imposes price limits for the first time after nickel crisis https: //www.reuters.com/business/lme-imposes-price-limits-first-time-after-nickel-crisis-2022-03-15/

[8]. Li, S., & Nadeem, M. (2010). Risk Management and Internal Control: A case study of China Aviation Oil Corporation Ltd.

[9]. Dyer, G. (2005). China makes habit of losses on commodity markets: LONDON 1ST EDITION. The Financial Times (London Ed.).

[10]. Liu, C. (2022, July 16). Tsinghua study on the impacts of digital transformation on Chinese enterprises. Fortune China. Retrieved from https: //www.fortunechina.com/shangye/c/2022-07/16/content_415340.htm

[11]. Ge, Z., Liu, J., & Pan, X. (2023). An analysis of Tsingshan Holdings Group's short-selling strategy and its failures. Journal of Financial Markets and Derivatives, 19(3), 101-120. doi: 10.1016/j.finmar.2023.05.002

[12]. Yeo, A. (2014). Sliding down a Slippery Slope: The US$550m Derivative Trading Loss of November 2004. INSEAD.

[13]. Kurien, D. (2005). Commodities Report: China may quietly cover short position in copper; Similarity to 1997 crisis leads some to speculate Beijing may step in again. The Wall Street Journal Asia.

[14]. C. Valvi, A., & C. Fragkos, K. (2013). Crisis communication strategies: A case of British Petroleum. Industrial and Commercial Training, 45(7), 383-391.

[15]. Manna, D. R., Marco, G., Khalil, B. L., & Esola, C. (2011). Sustainable markets: Case study of Heinz. Journal of Business Case Studies (JBCS), 7(5), 35-42.

Cite this article

Tang,X.;Wang,Z.;Guo,J. (2025). Risk Management Analysis—A Case Study of Tsingshan Nickel Incident. Advances in Economics, Management and Political Sciences,213,36-47.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of the 4th International Conference on Financial Technology and Business Analysis

ISBN: 978-1-80590-351-2(Print) / 978-1-80590-352-9(Online)
Editor: Lukáš Vartiak
Conference website: https://2025.icftba.org/
Conference date: 12 December 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.213
ISSN: 2754-1169(Print) / 2754-1177(Online)

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