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China says it won't recognize the recent copper trades...
- Thread starter blakec
- Start date
There seems to be a lot wild money in Chinese hands, however it does not seem to me there will be much trouble handling this copper trade mess... what's scary is actually those Chinese stocks listed in U.S. or Europe, it is almost guaranteed that legal investigation will be taken against a bunch of Chinese ADRs, such as CESV, INTN, and currently CMED, rampant accounting fraud and insider trading. I guess my point is China's state owned stuff will probably continue to be pretty solid, while those reckless private businesses that western world seems to prefer are the true bombs for investors.
The amount of copper in question is only 100-200,000 MT. Current copper open interest at the LME is about 340,000 contracts with a contract size of 50 MT: the amount in question is negligible. This news item is just a snack for the peanut gallery.
Quote from energytraderus:
The amount of copper in question is only 100-200,000 MT. Current copper open interest at the LME is about 340,000 contracts with a contract size of 50 MT: the amount in question is negligible. This news item is just a snack for the peanut gallery.
the amount in question is not negligble
1. there is only about 55,000m/t of copper avaliable in LME bonded warehouses
2. contract size is 25m/t
3. O/I is about 210,000 lots
Woodcutter is right about the contract size: I was thinking in terms of pounds--the COMEX unit size, but he's wrong about OI: LME updates "Market Open Interest" daily at http://www.lme.co.uk/dataprices_reports.asp. Still, the amount of copper in question is negligible. So the media have identified the possible holder of a 4-8000 contract short position; since there are holders of over 340,000 long contracts, focusing great mental energy on discerning motives of this one short holder is a waste. Big copper players have dismissed this news. It's better to focus on this weird move up in this metal: copper initially moved up on unprecedented Chinese buying in Fall 2003 which buying happened at the same time as a disastrous landlide at the world's largest copper mine, Freeport McMoran's Grassberg mine in Indonesia. Since these events, Chinese imports have dropped sharply, and Grassberg is operating at nearly 100%. I took about 10 cents out of copper on the short side in May before I fortunately stopped trading it. I still cannot figure out this move up. Until I do, I won't trade it again from either the long or short side.
Another reason as to why China does not belong in the WTO.
Russia probably deserves to be there more (they've been waiting for a very long time)... The biggest trick Chinese commies ever pulled. Fooling the world that they were capitalists...
Russia probably deserves to be there more (they've been waiting for a very long time)... The biggest trick Chinese commies ever pulled. Fooling the world that they were capitalists...
Quote from energytraderus:
Woodcutter is right about the contract size: I was thinking in terms of pounds--the COMEX unit size, but he's wrong about OI: LME updates "Market Open Interest" daily at http://www.lme.co.uk/dataprices_reports.asp. Still, the amount of copper in question is negligible. So the media have identified the possible holder of a 4-8000 contract short position; since there are holders of over 340,000 long contracts, focusing great mental energy on discerning motives of this one short holder is a waste. Big copper players have dismissed this news. It's better to focus on this weird move up in this metal: copper initially moved up on unprecedented Chinese buying in Fall 2003 which buying happened at the same time as a disastrous landlide at the world's largest copper mine, Freeport McMoran's Grassberg mine in Indonesia. Since these events, Chinese imports have dropped sharply, and Grassberg is operating at nearly 100%. I took about 10 cents out of copper on the short side in May before I fortunately stopped trading it. I still cannot figure out this move up. Until I do, I won't trade it again from either the long or short side.
The fact is that there is 55,000tonnes of lme warranted stock, it is alleged that SRB have to deliver 200,000tonnes to the market on the 21st Dec of this year to satisfy their short position, and 200 doesn't go into 55 very well so they either have to buy the outright, borrow the position to a later date, or warrant material from their alleged stockpile of 1.2m tonnes which isn't straightforward. But if you think this is a whole lot of nonsense then sell copper....
your link didn't work but the LME publish gross client and exchange open interest which often means positions are double counted ... fyi;
LONDON METAL EXCHANGE - FUTURES OPEN INTEREST SUMMARY LME/FUTOI1
AT CLOSE : 17-NOV-2005
COPPER USD GBP EUR YEN TOTAL
CASH /21DEC 41538 0 55 301 41894
22DEC/18JAN 35885 0 13 102 36000
19JAN/15FEB 33040 0 20 90 33150
16FEB/3 MTH 3325 0 0 0 3325
REST OF FEB 0 0 0 0 0
01MAR/63MTH 95072 0 101 170 95343
TOTAL 208860 0 189 663 209712
There is speculation that he was a rogue agent working for a foreign power which is trying to weaken or destroy China from the inside... Whatever. China needs better checks and balances if this kind of thing can happen undetected. I can't even buy a new ruler at work without my boss knowing about it. If these guys want to play in the 21st Century, they need to get it together and get some basic systems in place.
It's more likely that they screwed up and now don't want to take the heat and are therefore acting like a bully (if it's true that they won't recognize their trades, that is).
It's more likely that they screwed up and now don't want to take the heat and are therefore acting like a bully (if it's true that they won't recognize their trades, that is).
So have they found this trader yet? (last I heard he was AWOL)
I bet if they find him they will cut off his balls.....
I deal with the chinese every day and they are the craziest mofo gamblers in the world - no wonder this guy rolled the dice this big....typical....
I bet if they find him they will cut off his balls.....
I deal with the chinese every day and they are the craziest mofo gamblers in the world - no wonder this guy rolled the dice this big....typical....
Quote from cable:
There is speculation that he was a rogue agent working for a foreign power which is trying to weaken or destroy China from the inside... Whatever. China needs better checks and balances if this kind of thing can happen undetected. I can't even buy a new ruler at work without my boss knowing about it. If these guys want to play in the 21st Century, they need to get it together and get some basic systems in place.
It's more likely that they screwed up and now don't want to take the heat and are therefore acting like a bully (if it's true that they won't recognize their trades, that is).
What if this is a manufactured squeeze and all this time the Chinese govt are dumping at the highs? The rogue trader will look like a hero after settlement then.