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HOTLINE: ‘Certain parties’ then, and now

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A copper trader was relishing the spat between Jiangxi Copper and other Chinese copper smelters on one side and “certain parties” on the other.
The smelters (after a meeting involving fabricators and traders too) have taken aim at companies they say are distorting the copper market.
The smelters say they will be delivering 100,000 tonnes to London Metal Exchange warehouses in this quarter to close their short positions: a big chunk of metal, given that China exported around 156,000 tonnes in total last year.
“The last time we were told China would deliver metal was in 2005-2006 when the State Reserve Bureau was supposed to deliver physical against an LME short.
"That didn’t happen, the trader was ‘dismissed’ and the price went from $4,000 to $8,000,” he said.
He was recalling the story of SRB trader Liu Qibing, which gripped the market when it emerged the SRB had run up a short position it could not immediately cover. Liu disappeared, and was later imprisoned.
(Before you start buying copper in anticipation of a similar run-up prices, however, it is worth remembering there is no suggestion in this case that the shorts will not be covered.)
Warming to his theme, the trader recalled an incident in the late 1990s, when the China National Nonferrous Metals Import & Export Corp issued a statement saying that a large trading company — the “certain parties” of the 1990s, perhaps — was not welcome to do business in China because it was squeezing the zinc market.
One smelter was caught short as a result, and told its LME brokerage it would deliver 100,000 tonnes of zinc to cover.
It delivered 15,000 tonnes — some of it with 1972 tags.
It couldn’t happen now. Could it?

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