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Thread: China hunts fugitive commodities trader

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[quote=MARRIE,307730]In its Thursday edition, China Daily reported that a trader named Liu Qibing, working for the National Control Center of the State Reserve Board -- a central government body that stockpiles commodities for the country's industrialization -- shorted copper on the London futures exchange, meaning that he bet that prices would fall.

"But prices kept rising, exposing the government to losses of hundreds of millions of dollars," the report noted.

In recent days, China has been selling large volumes of copper in a bid to drive prices down to contain the scale of the losses. "The auctions were triggered by the misjudgment of trader Liu Qibing," the report said, adding the state plans to sell an additional 20,000 tons next week.

In financial circles, China's copper calamity evokes a similar episode nearly a decade ago, when a trader at Japan's Sumitomo Bank lost $1.5 billion by buying huge volumes of copper in anticipation of a price spike, only to see it plummet. Some recall Nick Leeson, whose $1 billion in losses on the Tokyo stock market in the mid-1990s brought down Barings, the venerable British merchant bank.

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