China says it won't recognize the recent copper trades...

done by Lui qibing. The SRB is putting all the blames on Lui personally for the trades. I read it on FT.

what's your take on this?

 

They've done it before with China petro not taking energy trades in the last 6 months I think.

Probably bearish for copper

 

Bottom line is, they have not stopped being horsesh*t commies.

 

If that were the case, who'd be stupid enough to trade with them other than on a cash basis?

 

So they can't keep their own house in order and the rest of the world has to pay for it, nice.

 

if thats case ... how come copper has not sold off hard and stayed down since this "news" ?

 

f.. them let them trade with n. korea and cuba then.

 

Rogue or pawn?
Is it entirely implausible that Liu could have deceived his overseers at the SRB? Not really: financial malfeasance is frequent in China, and so is an unwillingness of officials to report setbacks to their superiors. Furthermore, the regulation of Chinese financial markets is anything but strong, and if Singapore and Japan, which are much better regulated overall, could not avert the Barings and Sumitomo scandals, it is not hard to see how Liu, far from official oversight in London, could have conned SRB officials and possibly the LME as well.

Still, a few "grassy knoll" rumblings could be discerned from the commodity markets crowd. China is a huge consumer of copper, and has been jawboning for months about the need for lower prices, as Chinese copper users complained to the government about high prices. This has led some to suggest that the Liu affair was an orchestrated attempt to force down copper prices which backfired on the government.

In this scenario, the knowledge of Liu's huge short sales by other traders could have helped to create a self-fulfilling prophecy of lower prices in the market. In favor of this theory is the undisputed fact that the SRB, which has not historically taken an overt commercial role, recently started openly selling copper on the spot and futures markets. Metals analyst Neil Buxton of GFMS Metal Consulting told the Independent: "There have also been attempts to talk the markets down that have been proved to be unproductive ... users of copper have been complaining to the government all year that their profit margins have come under extreme pressure from the rising price of copper."

http://www.atimes.com/atimes/China_Business/GK17Cb05.html

 

The market is trying to squeeze him out of the position?

 

because the shorts still exist*. The brokers who cleared these trades for SRB will now be short to market, if SRB do default then the brokers will cover the positions they inherit and sue SRB for losses.

*this assumes the short position existed in the first place