On June 5, just after the second batch of 16 million tons of steel futures contracts expired, Li Yi submitted an application for spot delivery to the exchange and began the second squeeze.
Faced with this squeeze, both the Sheffield company and the Sassoon family felt desperate.
The previous more than 12 million tons of spot steel had basically exhausted their entire inventory, and they even had to use many contacts of the Sassoon family to barely raise the spot needed for delivery.
Although they were also actively collecting spot steel afterwards, Sheffield Steel Company was not the only steel company that was over-selling short orders. Almost all steel companies were facing the crisis of long positions.
Therefore, competition for rebar and channel steel that meet delivery standards is very fierce in the market. In many cases, even those with money cannot buy them.
During this period, even if the Sheffield Company went all out to purchase, it only purchased less than 2 million tons, which is still far from the 16 million tons currently needed.
Although they have asked for help from the largest steel company in the Thieving Eagle, and the other party has agreed to mobilize 10 million tons of steel for them, water from afar cannot quench their thirst for nearness!
After all, if you want to transport more than 10 million tons of steel from North America to the British Isles, it will be impossible to complete it in just a few months. And how could Li Yi, who was obviously trying to force a position, agree to wait a few months for them? month's time.
In desperation, the exchange had no choice but to mediate.
When it was determined that Sheffield Steel was indeed unable to carry out spot delivery, the exchange could only convene the two parties for negotiations, hoping to facilitate a settlement between the two parties.
There is nothing the exchange can do. You must know that once Sheffield Steel confirms that it cannot deliver, their exchange will need to be responsible for these long sellers.
Usually they have two methods, one is to purchase steel from the market and deliver it to the long side, and the other is to redeem the expired contract in the hands of the other party at the market price.
No matter how it is handled, the exchange will have to bleed heavily.
Although they can recover this part of the money from the Sheffield company that defaulted through regulations, and even impose fines on them, it is unknown whether they can get it back.
If the shareholders behind Sheffield Steel completely abandon the company, or if the company becomes insolvent and files for bankruptcy, the money paid to the bulls by the exchange may be in vain.
Because of this, the exchange hopes that both parties can negotiate and resolve this matter!
If the negotiation is successful and the defaulting short seller comes forward to solve the problem on its own, the exchange will not need to advance funds.
Li Yi did not refuse the negotiation led by the exchange.
Although his purpose was to force Sheffield Company into bankruptcy, more importantly, he wanted to make the Sassoon family behind it pay the price.
If Sheffield were to go bankrupt right now, the guys at the company would probably move the company's money while filing for bankruptcy.
You must know that in the past few months, Sheffield Company has withdrawn at least four to five billion pounds of funds by selling short orders. If these funds were transferred, the price paid by the Sassoon family would be much smaller.
And not only did he want Sheffield Company to go bankrupt, he also wanted them to spit out all their funds.
After three days of negotiations, Li Yi finally chose to "compromise" and no longer required spot delivery from Sheffield Steel Company, but switched to cash settlement.
However, Sheffield Steel did not take advantage of it. They needed to redeem the contract at a price 15% higher than the market price.
Calculated based on this price, Sheffield Company needs to pay 388.7 pounds per ton to redeem the expired contract in the hands of Li Yi and others.
For just the 16 million tons of short orders held by Li Yi, Sheffield Steel Company needs to pay a huge sum of 6.22 billion pounds.
Including the redemption of contracts from other companies, in just one week in early June, Sheffield Steel took out nearly 7 billion pounds in one go.
This money not only emptied the Sheffield Company, but also implicated the Sassoon family behind it. They also had to pay 2 billion pounds for the Sheffield Company's actions.
Fortunately, Sandy, the head of Sheffield Company, has received news from his brother from the front line. The imperial army has captured Port Stanley, the most important city on the Falkland Islands, on the 13th, and has nearly 10,000 Afghan soldiers under siege. in a small area.
Now the Afghan soldiers are beginning to hesitate and become frustrated, and the top commander of the Afghan army, Major General Menendez, is already talking to them about conditional surrender. As expected, news will spread that the Empire has fully recaptured the Falklands within a day or two. Return to the country.
Before the end of the year, the war will definitely be over.
This is absolutely great news for the struggling Sheffield Company and the Sassoon family.
There was no doubt that the price of steel would plummet once news of the end of the war came.
At that time, they can redeem the remaining 11 million tons of short orders as long as they spend more money.
Although losses are inevitable, as long as Sheffield Company does not go bankrupt, the company's shareholders can still accept this result.
And this is also the fundamental reason why the Sassoon family is willing to spend money to save the Sheffield Company. To put it bluntly, the largest steel company in the empire is still valuable to them.
Things were indeed as they expected. Just one day later, good news came from the front line: the imperial army successfully captured Port Stanley!
On June 14, No. 10 Downing Street once again released shocking news: the commander of the Argentine garrison surrendered to Major General Moore of the Royal Marines, and the 9,800 besieged Argentine soldiers became prisoners of war.
In addition, 4,167 Argentine service members were repatriated to Argentina by the ocean liner Canberra.
And after the frontline troops captured Port Stanley, the imperial army completely took control of the Falklands. There is no longer any suspense at this point in the war!
When the news spread back to the mainland, the entire British Isles fell into a complete carnival. Everyone took to the streets to celebrate the empire's victory.
You must know that over the past two hundred years, the Empire on which the Sun Never Sets has conquered one country after another with its powerful ships and cannons. It is almost invincible and invincible.
At its peak, the empire's territory covered almost half of the world. India, Australia, New Zealand, Cyprus, Jamaica, Uganda... these were all colonies of the empire.
However, after the end of World War II, the empire's national power weakened rapidly, the colonies became independent one after another, and the empire's glory became increasingly dim!
The victory of the Battle of the Falklands made the citizens of the British Isles once again feel the power of the empire, and also allowed them to see the hope of the empire's rise.
When this news came, the entire stock market and futures market were shocked again. Everyone knew that the countdown to war had entered.
For a time, the prices of military industry stocks, various metal futures, and commodities fell into a rapid decline again.
And this naturally includes steel. The bulls holding short contracts are also a little unable to sit still, and they are preparing to sell the contracts in their hands to cash out.
At this time, Sheffield Steel also used the company's shares as collateral to borrow 1.5 billion pounds from the bank, preparing to take advantage of the drop in steel prices to buy back a large number of short contracts to completely quell the squeeze crisis.
But at this time, mainstream media including The Times and the Oxford Gazette once again broke a piece of jaw-dropping news.
The title of this news is "Steel Crisis with Overcapacity". The news is also an investigative report. This report is not aimed at Sheffield Company, but the smelting industry in the entire British Isles and even Europe.
According to this investigative report, after eight consecutive years of steel overcapacity, domestic steel companies in the British Isles and other European countries have reached the edge of a life-and-death cliff.
In order to survive, they have to take measures such as layoffs, salary cuts, and production cuts to reduce the company's expenses.
Take the top five steel companies in the British Isles as an example. The production capacity of these companies has dropped to half of its peak. Some companies even have only one-third of their production capacity left. In the past two years, the country has consumed more than They are all steel previously in stock.
Previously, due to the stable international situation, these problems were well covered up. However, due to the impact of this war, the problem of insufficient production capacity of some companies was exposed, and this fig leaf was suddenly lifted.
The investigation report finally boldly predicted that the British Isles and even the whole of Europe will face a huge steel crisis next!
With the fermentation of this report, the London futures market once again surged...
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