Copper at 12-month low after mystery investor unwinds $1bn bet
Liquidation of a large position triggers violent sell off in Shanghái
Henry Sanderson and Neil Hume
The liquidation of a $1bn bet placed by a mysterious Chinese investor has roiled the copper market, triggering a violent sell off that has seen the metal plunge to a 12-month low.
Data released by the Shanghai Futures Exchange showed the huge futures position held at Gelin Dahua, a Beijing-based brokerage, has fallen from a net long of 36,050 lots last Wednesday to just around 10,000 lots today.
That is the equivalent of 80,000 tonnes of copper worth roughly $800m that has been dumped on the market in the past few trading sessions in China, placing huge pressure on the global copper price.
Since August last year, Gelin has been the dominant buyer of copper, stepping into the market whenever the metal weakened, according Nicholas Snowdon, analyst at Deutsche Bank.
“There was in other words a perceived Gelin put in the copper market,” said Mr Snowdon. “This now appears to be dissipating fast.”
The position is rumoured to be owned by a coal investor in Shanxi, the location of Beijing-based Gelin Dahua’s parent company, Shanxi Securities. But positions on the Shanghai Futures Exchange are only divided by securities companies, not by individuals.
It is not clear why Gelin has started to liquidate the position but local media said it was either a strategic retreat or forced selling.
The price of the copper has been under pressure since of the start June on fears about a trade war between China and the US could economic growth. The metal, used in everything from washing machines to cars, has fallen 14 per cent from the four-and-half year high of $7,348 a tonne.
If Gelin keeps selling — and traders reckon its position is now underwater — the price of copper could fall to $6,000 a tonne. But if it decides to retain a position, copper could bounce back.
“Whilst sentiment has deteriorated on the trade war escalation, the reality is the outlook for the copper market has not materially changed and if anything, the move lower in price will only serve to tighten market conditions as scrap supply will dry up in third quarter on the price move lower and tensions in mine labour negotiations rise as miners generosity rescinds with the copper price,” said Mr Snowdon.
Talks over a new wage deal at Escondida, the world’s biggest copper mine, are still far from being concluded with just left weeks left to conclude negotiations. Failure to reach an agreement last year led to 44-day strike.
Copper for delivery in three months on the London Metal Exchange — the global benchmark — rose $69.50 to $6,378.
martes, julio 10, 2018
COPPER AT 12-MONTH LOW AFTER MYSTERY INVESTOR UNWINDS $1BN BET / THE FINANCIAL TIMES
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J.P. Morgan
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Paulo Coelho
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Friedrich Nietzsche
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
Lao Tse
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
Warren Buffett
No soy alguien que sabe, sino alguien que busca.
FOZ
Only Gold is money. Everything else is debt.
J.P. Morgan
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Proverbio Chino
Quien no lo ha dado todo no ha dado nada.
Helenio Herrera
History repeats itself, first as tragedy, second as farce.
Karl Marx
If you know the other and know yourself, you need not fear the result of a hundred battles.
Sun Tzu
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
Paulo Coelho

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