Mover Mike

The WSJ reports China Copper Trader Missing by Andrew Hotter

A Chinese government copper trader, who is said to have built a big short position on the London Metal Exchange, has inexplicably ended contact with other dealers in both London and in China, people who have worked with the trader said.

Liu Qibing, who worked for China's State Reserve Bureau (SRB), took short copper positions that some London dealers said amounted to between 100,000 and 200,000 tons. The traders said the SRB would find it difficult to deliver the amounts of copper traded by what they said was a deadline of Dec. 21

If there is such a short postion, the SRB would have to scramble to meet delivery scheduled for Dec. 21st. The SRB denies that any such person named Liu Qibing works for them.

If Mr. Liu's short position is between 100,000 and 200,000 tons, it would be huge by LME standards. Copper stocks on the LME were only 65,350 tons on Friday, a level generally considered low.

[...]

Traders in London and New York say SRB losses could be in the hundreds of millions of dollars. Such a loss would be the largest on the LME since Sumitomo lost an estimated $2.6 billion in 1996.

Traders say if there is a short of this magnitude, SRB could handle delivery from its strategic reserves, but it would find itself with its reserves depleted. See Chart of Dec Copper.

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