By WANG Yong
About 200,000 tons of copper concentrate worth 6 billion yuan (US$880 million) has gone missing at a storage site in Qinhuangdao - a result of fraud. The 13 companies involved are working with the police.
The missing 300,000 tons account for about 1.3 percent of China’s total annual imports and smelters may face a temporary shortage. Copper concentrate has been hovering around US$70 a ton recently. There might be a small adjustment in the relative price between spot and future contracts.
Two importers, Ningbo Hesheng International Trading and Huludao Ruisheng, got control of the copper concentrate through a procedure called telex release. Under traditional international shipping rules, the financers must have known that the goods had been released because the importers need a bill of lading from them. But a telex release only requires an electronic copy of the bill.
LIU Yu runs both importers and has been using telex releases for a long time with the help of the China Ocean Shipping Agency Qinhuangdao, a customs broker. Liu controls nine other businesses and serves on the boards of at least three commodity trading companies.
Qinhuangdao Port, which operates the storage site, issued a statement denying liability. The port’s obligations to the customs broker companies were duly fulfilled, the statement says.
Huludao Ruisheng faces severe financial losses as a result of speculating in copper. Liu was reportedly long copper in June and was forced to liquidate as copper prices plunged. Copper is 20 percent down from the high of this year.
