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Chinese metals merchants are facing losses of at least 1 billion yuan (approximately US$144 million) following the abrupt disappearance of dealer Xu Maohua, known as 'Hat'. Xu orchestrated transactions involving SDIC Commodities Co., a unit of State Development & Investment Corp., leaving behind unpaid debts for copper and other metals.

Legal actions are underway, with a Tianjin court seizing about 3,150 tonnes of refined copper from SDIC in Wuxi, Jiangsu. Additionally, Guangdong's Prolto Supply Chain Management Co. has filed a 219 million yuan claim against SDIC for non-payment.

Xu's departure has exposed a chain of circular trading practices, raising regulatory concerns. The State-Owned Assets Supervision and Administration Commission has mandated a review of operations among major commodities units, aiming to eliminate revenue-boosting activities deemed non-essential. Market volatility persists, with fluctuating copper futures and a weakening yuan impacting smaller traders.