November 17, 2005

SRB SOL:

High-stakes 'poker game' in copper scandal (Asia Times, 11/18/05)

As the copper trading flap involving alleged "rogue trader" Liu Qibing continued to unfold, China sold more copper in an effort to convince skeptical traders that it had sufficient reserves to force down soaring prices, even as it continued to deny that Liu's transactions had been authorized. [...]

Traders in London guessed that losses to the Chinese government could amount to US$200 million, and warned that China could find itself excluded from metal markets if it failed to cover Liu's contracts. Liu himself remained missing, although the South China Morning Post reported that he was believed to be at home in Shanghai. [...]

"The SRB's decision to continue selling its reserves is just a posture [that it is determined to push down copper prices]," said Wang Qianming, a metal industry analyst from CITIC Securities. "But as long as the market fundamentals [ie, the tight supply] remain unchanged, such a move will do no good," he added.

"The main motive behind the SRB's second auction [was] to bring down the domestic copper price in the hope that [this] will in turn drag down prices on the international markets," a senior copper analyst from Antaike Information Development Co Ltd, a Beijing-based metal industry consultancy, told China Daily. "The market is deeply suspicious of the SRB's capacity to control prices and about the amount of its reserves," said the analyst, who did not want to be named.

Posted by Orrin Judd at November 17, 2005 8:46 AM
Comments

Time to get an early start on minting those 2008 Summer Olympic commemorative coins, I guess.

Posted by: John at November 17, 2005 9:02 AM
« WE TOO COULD BE EVIL: | Main | WHY NOT USE HOUSING PROGRAMS TO EFFECT THIS KIND OF DISPERSAL NATIONWIDE?: »