A very deep dive from Bloomberg via Mining.com, September 18:
From a start guarding trains full of metal from thieves on freezing winter nights, He Jinbi built a copper trading house so powerful that it handles one of every four tons imported into China.
A born trader with an infectious sense of humor, the 57-year-old grew Maike Metals International Ltd. through the rough-and-tumble rush for commodities in the early 2000s, to become a key conduit between China’s industrial heartlands and global merchants like Glencore Plc.
Now Maike is suffering a liquidity crisis, and He’s empire is under threat. The ripple effects could be felt across the world: the company handles a million tons a year — a quarter of China’s refined copper imports — making it the largest player in the most important global trade route for the metal, and a major trader on the London Metal Exchange.
With his wide network of contacts giving enviable insight into China’s factories and building sites, He has been a poster child for China’s commodity-fueled boom over two decades — making a fortune from its ravenous demand for raw materials and then plunging it into the red-hot property market.
But this year, Beijing’s restrictive Covid Zero policies have hit both the property market and the copper price hard. After months of rumours, He admitted publicly last month that Maike had asked for help to resolve liquidity issues.
He said the problems are temporary and affected only a small part of his business, but his trading counterparties and creditors are being cautious. Some Chinese domestic traders have suspended new deals, while one of the company’s longest-standing lenders, ICBC Standard Bank Plc, was concerned enough that it moved some copper out of China that had been backing its lending to Maike.
Even if it can secure support from the government and state banks, industry executives say Maike may struggle to maintain its dominant role in the Chinese copper market.
Much as He’s rise was a microcosm of China’s economic boom, his current woes may mark a turning point for commodity markets: the end of an era in which Chinese demand could only go up.
“In some ways, Maike’s story is the story of modern China,” said David Lilley, who started dealing with Maike in the 1990s, first as a trader at MG Plc and later as co-founder of trading house and hedge fund Red Kite. “He has skillfully ridden the dynamics of the Chinese economy, but no one was prepared for the Covid lockdowns.”....
....MUCH MORE
May 2022
Copper: It Is All About China's Economy
If China ever begins tearing down the tens of millions of apartments that are sitting empty the amount of supply from copper that will be recycled is mind boggling. Barring that, the huge cutback in residential construction has taken one of the largest demand factors out of the equation and except for the run-up in price we saw immediately after Russia invaded Ukraine, when it appeared China was converting their foreign exchange holdings into just about any kind of tangible stuff that would be storable, grains, metals etc., the trend since the Shanghai lockdowns became widely publicized has been pretty much unidirectional....September 1, 2022
"China tears down tower blocks in effort to boost stalling economy" (plus Keynes and copper)
September 9, 2022
"China’s copper imports continue at record pace on lower prices"
The government/Communist party are not shy about hoarding storable commodities e.g. January's "China and Food Prices: "One reason for rising food prices? Chinese hoarding"" and the recent order from the State Council for the release of 37 tonnes from the National Pork Reserve for the month of September.....
August 8, 2022
And In Non-Labor Market News: "Copper Worth Nearly Half a Billion Dollars Goes Missing in China"
Most active (December) NYMEX futures: $3.4750, our best guess is lower, a test of the summer low of $3.13 and possibly sub-$3.00
