Chinese Metals Traders Face ¥1 Billion Losses After Key Dealer Xu Maohua Disappears
Chinese metals traders are facing losses exceeding 1 billion yuan (approximately US$144 million) after the sudden disappearance of dealer Xu Maohua, who left unpaid debts tied to copper transactions with SDIC Commodities Co. Legal actions are underway, including the seizure of 3,150 tonnes of refined copper and claims from other companies for non-payment. Xu's exit has highlighted problematic circular trading practices, prompting regulatory scrutiny and a review of operations among major commodities firms.
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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.
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