A Chinese nickel titan is staring down an $8 billion trading loss as a short squeeze sends the metal soaring, new report says

• Tsingshan Holding Group was looking at an $8 billion trading loss after nickel prices soared, The Wall Street Journal reported Tuesday.
• The company has assured creditor banks in China that its financial position is sound.

Chinese nickel heavyweight Tsingshan Holding Group was looking at an $8 billion trading loss after nickel prices suddenly exploded higher following Russia's invasion of Ukraine, The Wall Street Journal reported Tuesday.

The paper loss stood at $8 billion on Monday before the London Metal Exchange on Tuesday suspended trading in the metal used to produce stainless steel and batteries for electric vehicles, the Journal reported, citing people familiar with the company.

The surge in the price of nickel spelled losses for companies like Tsingshan that had used futures contracts to lock in prices for their products. When prices spiked, companies looking to close soured positions and buy back the contracts couldn't find anyone to sell to them, the Journal reported.

The exchange suspended trading after prices more than doubled to briefly top $100,000 a ton for the first time ever as international sanctions against Russia triggered a short squeeze in the market. Any trades on Tuesday before the halt will be canceled.

Some of Tsingshan's creditor banks in China grew concerned about the effect of the trading losses on its balance sheet. Tsingshan assured them that its financial position was sound and that it could weather even "extreme losses" from forward contracts, the Journal reported, citing its unnamed sources.