Vol 7 Chapter 27: Seize copper pricing power

The emergence of the Internet has brought about the rapid spread of world information.
Therefore, public outcry has gradually become a thing of the past in many exchanges.
United States.
Boston.
Downey Wilson looked at the computer and watched the fluctuations of Meijing copper on the screen. His heart was extremely excited and nervous, as well as uncontrollable excitement.
Donny Wilson is a personal investor in financial derivatives. Uh, this is a better way of saying. In fact, he works as a porter in Walmar, and when he has money, he will do speculative transactions in the financial market.
In short, it is a retail investor.
And Donny Wilson’s recent trading product is Meijing Copper.
That is, copper futures contracts listed on the United States (New York Mercantile Exchange), commonly known as "American Copper".
The biggest difference between it and London copper is that copper futures are open outcry orders, while on-exchange copper is an electronic trading order for copper futures.
The copper futures on the American Exchange are not the case. It is refined copper, that is, deep-processed copper.
Contract code: HG
Contract size: pounds
Contract type: precious metal futures
Exchange:
Contract month: all year
Liquidation form: physical delivery
Minimum price fluctuation: ￠.50
Daily fluctuation range: none
Trading time: Monday-Friday 6:00AM-next day 5:15AM
Last trading day/time: The third working day from the end of the delivery month
Last delivery day: It may be any working day of the delivery month, but no later than the last business day of the delivery month
A week ago, the major media were analyzing the future pressure on the copper market. Therefore, Donny Wilson established his own short position on Meijing Copper.
Each single contract fluctuates at $12.5. He took out all his savings and overdrafted two credit cards, hoping to achieve financial freedom in this wave of market conditions.
Only a week later, the price of American copper has not changed much, and he has not made much money.
Huh!
Suddenly a beep sounded on the computer used to count the supermarket data.
Your account has been forced to liquidate.
On the computer screen, the price of refined copper, which had been steady, suddenly surged upwards 90 degrees like an anti-aircraft gun. The handicap was hit by dozens of 100-hand buy contracts, which instantly increased by 6%.
Because of this, all short positions of Donnie Wilson were directly liquidated by the system risk processing program. The 20,000 US dollars in the account, in one second, left only 300 US dollars in loss, and almost broke the position.
As these buying data crossed over, there was a large amount of short-term suppression in the market, and the copper price returned to its original position again.
It happened too fast.
Therefore, the straight line that had just gone up on the trading software was suddenly smoothed out again, and everything seemed to have never happened.
As if dreaming.
This is how Donny Wilson looked at the three hundred dollars left in his account.
There is no change in the price of copper. There is no more than 17,000 dollars in his account...
In an instant.
I don’t know how many people have experienced the same experience as Donnie Wilson.
Thousands of retail speculators watched the money in their accounts suddenly disappear, and they didn't even understand what happened.
Unfortunately, no one makes any money.
Because even a long trader, in just a moment of effort, they can't fully respond to come and go to close their positions.
At the same time, I don't know how many people watched the loss on the account, and the whole person was struck by lightning.
And this time.
The first international capital of Wall Street.
Rania looked like a frightened rabbit, fidgeting and looking at Shen Jiannan in fear, his face pale in fright.
Just now, she accidentally bumped into a strange thing on Shen Jiannan's desk, and then she heard a beep, and a straight line flashed across the computer screen.
After coming to the company to play several times, she has probably understood that those strange things on the screen represent unimaginable money.
Shen Jiannan was sitting on the sofa drinking tea, enjoying the elegant temperament of Shinkawa Masako. He suddenly heard an alarm, and then looked at Rania's fear, he guessed something instantly.
Walked over and took a look.
Good guy.
Because the keyboard was unlocked, it was instantly triggered to buy more than 2,000 Meijing copper buy contracts.
Rania looked at Shen Jiannan's face flat, and didn't seem to be angry because of it, and she was relieved a lot. She cautiously said: "I didn't mean it."
Shen Jiannan said, "Do you know what you did just now?"
Rania: "..."
Shen Jiannan said lightly: "You triggered a one-click bid and bought 2600 Meijing copper contracts, which is about 2.6 million U.S. dollars. I estimate that you probably killed hundreds of speculators."
Rania almost cried: "I didn't mean it."
Shen Jiannan said, "My rule is that if you do something wrong, you need to be punished."
punishment?
Rania did not know what punishment he would be punished.
But being left here alone, except when she was with Avril Lavigne, she was terrified facing Shen Jiannan.
Hearing that he was going to be punished at this time, holding his fingers, looked at Shen Jiannan pitifully, his clear and scared eyes seemed to be asking what punishment he would accept.
Shen Jiannan did not speak, returned to the coffee table and glanced at Masako Xinchuan.
Xinchuan Masako smiled without saying a word, poured a cup of tea, leaned over Shen Jiannan, and flew into his mouth.
Before long, the kimono on Masako Shinkawa opened up a lot.
Rania stared at the two blankly, flushed, feeling extremely sad...
But Shen Jiannan hooked her hands and motioned for her to come.
The little girl did not dare to refuse, she lowered her head and did not dare to look at them, and walked over cautiously, but she could hear all kinds of sounds in her ears...
Shen Jiannan patted the side of the sofa and motioned for Rania to sit down.
Rania did not dare to refuse, her white face almost dripping with blood, but she could only sit down.
Shen Jiannan ignored her, enjoying the gentleness of Shinkawa Masako, took out his mobile phone and dialed William's number...
For half a month, Sumitomo has invested more than US$3 billion in order to suppress the continuous release of pressure from the shorts, but even so, the price of LME copper remains unbreakable in the 2,700 range.
In addition, the Wall Street Journal, London Daily and many media organizations are all creating momentum for the bears, and Sumitomo has taken on a huge market selling pressure.
London Sumitomo Commercial Non-Ferrous Metals Trading Department.
Binzhong Tainan looked indifferent, looked at the price of copper on the central computer quotation system, picked up the phone on the desk and called the on-site trading team: "Sakata-san, it's time to strangle those guys."
Sakata Koyama croaked, and gave orders to the trading team.
CA3M, buy 10
CA3M, buy 10
CA3M, buy 10
......
Large purchases caused the price of copper in London to soar, and within a short time the increase exceeded 2%.
And this time.
William was chatting with Shen Jiannan on the phone. He heard his boss let him open a position in a forward contract. He was a little puzzled and said: "Boss, Sumitomo's main force is in the March contract. It makes no sense for us to open a position in 6789."
Shen Jiannan said lightly: "You will understand after a while."
William didn't ask much, and replied: "Then we still have more positions in the long positions in March?"
Shen Jiannan glanced at the soaring trend of copper on the big screen in the distance and said: "Of course, since Sumitomo wants to raise the price, we will help them."
On the same day, London Copper closed with a 3.5% increase, breaking through the recent consolidation high of 2,700.
After the market closed, relevant news spread out in the market.
Bulk News:
Sumitomo Metal Mining Company (l) said on Thursday that it is reviewing its strategic options for a minority stake in the Sierra Gorda copper mine in northern Chile, which is controlled by the Polish Copper Group (KGHM).
The Asian mining giant’s 45% stake in the mine is part of a joint exploration with corporate financial and legal advisors, Royal Bank of Canada Capital Markets (ets) and Sullivan & Cromwell Law Firm (Sullivan &) One.
KGHM has been criticized by outsiders for its huge investment (currently US$1.2 billion and still increasing) allocated to Chilean mines.
Serra Gorda began production in 1989. Due to challenges in metallurgical processes and processing with seawater, its output has not reached expectations.
Edward Steck (ck), an analyst at the Bank of Montreal Financial Group (ets) in Canada, estimates that if the mine meets design costs and productivity, the current value of Sumitomo's shares is approximately $513 million.
He said in a report to investors, "It is worth noting that due to poor performance, shareholders of the joint venture company have been forced to provide external funds every year since its establishment, which may cause discounts."
World Nonferrous Metals Daily:
Peru Green Mountain Copper Mines (eSAA) spokesperson zar said that the company’s US$850 million expansion project is basically operating at full capacity, but due to the uncertainty of the copper market in the future, the production of new projects will be postponed until March 1995,
Lvshan Copper Mine currently operates two open-pit mines in southern Peru.
American Freeport McMorlan Copper & Gold Company (er&Gold) holds a majority stake in Green Mountain Copper Mines, and subsidiaries of Peru’s Buenaventura Mining Company () and Sumitomo Corporation of Japan (.) also hold its shares. .....
August 27.
Mining News:
The copper mine is located in the Atacama Desert in Antofagasta Province, Chile, and is named after
hidden
in Spanish. The mine was discovered and shipped the first batch of concentrates. BHP Billiton owns 57.5% of the mine, Rio Tinto has 30%, Mitsubishi has 8.25%, Nippon Steel Mining has 3%, and Mitsubishi Materials has 1.25%.
Yesterday, the copper mine talked about concerns about the future economy in a telephone interview. The company does not rule out that it will significantly reduce production in the future to avoid possible losses caused by the economic downturn...
As of the month, the reserves and resources possessed totaled 27 billion tons, with a grade of 0.51% copper and 0.014 g/ton gold. The copper output of ndida is about 1,189,100 tons, including 938,900 tons of concentrate copper and 250,200 tons of cathode copper......
......
In the night.
The whole London was shrouded in light, flashing and flashing, it was a different life.
Binzhong Tainan was extremely happy, looking at the still disk, his eyes were full of disdain and contempt.
What about First International Capital? How about Quantum Fund and Tiger Fund. You can find mining companies to make a big impact, thinking that I will not?
You guys, you will never understand how terrifying the ancient Sumitomo is.
He called the secretary Jiang Lizi to open a bottle of red wine and took the phone to express his gratitude to the major companies he had contacted before. Binzhong Tainan played with the secretary and enjoyed the upcoming victory.
But don't know.
At this time, the president of the London Metal Exchange and the UK financial regulator are holding a meeting at this time.
After a brief meeting, the London Metal Exchange formulated new regulations: In view of the recent large-scale increase in copper holdings, in order to prevent market manipulation, stabilize market order and orderly development of the world economy, and support the orderly economy of enterprises, starting tomorrow , The premiums and discounts between Lun Copper's contracts must be between -28 and 0.
Various rules stipulate the premiums and discounts between LME copper, spot and forward.
In short, it can be understood that the main force of Lun Copper in March can only be discounted by 28 between the forward price and the forward price, but no premium, otherwise, an anti-manipulation investigation will be triggered.
at the same time.
China, Shanghai Metal Exchange.
This exchange, which opened in May, launched a standard contract for electrolytic copper futures in June, which is divided into medium-term and forward contracts.
It adopts a modern central computer for quotation transmission and is the first domestic commodity metal exchange approved by the Securities Regulatory Commission.
He Yuanchao, a former professor of economics at Huahai University, served as the first general manager.
It's daytime.
He Yuanchao and Song Jun were making tea in the office, talking about the future planning of the market, UU reading www.uukahnshu. Com unknowingly talked to Shen Jiannan, they both sighed and sighed.
Suddenly, assistant Liu Yi hurriedly ran in and said, "Mr. He, the copper futures has suddenly increased by 100,000 lots..."
He Yuanchao and Song Jun met and smiled.
In this era of financial pricing, if you want to seize the pricing power in the copper market, you can do without a financial derivatives market.
However, if you want to grab market pricing power, you need corporate hedging to participate, and corporate hedging requires speculators to participate in transactions and take risks. This requires market making to attract capital from all over the world to trade. Can grab market pricing power.
London Copper, with a high holding of hundreds of thousands of lots, has a huge appeal to the market.
Shanghai Stock Exchange, if you want to do it, it can do without huge trading volume.
He Yuanchao motioned to Liu Yi not to panic, and said: "I know. First Mining said hello to me before. They will register part of the registered warehouse receipts on our exchange. You can follow up when you come back."
Lewis was full of doubts.
The World Mining News previously reported extensively about the acquisition of various copper mines in Zambia by No.1 Mining, and even Wall Street paid close attention to how such an international mining giant would register a warehouse receipt at the Shanghai Metal Exchange.
You know, Shanghai Metal Exchange, the trading volume of copper futures is only a few thousand lots, this kind of giants simply cannot hedge here.
However, doubts belong to doubts.
Realizing that He Yuanchao didn't want to say more, Liu Yi agreed and left the office.
That day.
The trading volume of copper futures on the Shanghai Metal Exchange reached a terrifying 200,000 lots.
When the market closed, the exchange announced a list of block trading customers, and the market was making a lot of noise.
Long chief: Masukura 60,000 lots, Jiuding Futures.
Short chief: Daiichi Mining, Masukura 80,000 contracts...