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
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 didnt 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
(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
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
It delivered 15,000 tonnes some of it with 1972
It couldnt happen now. Could it?