Rebirth 76: Industrial Internet Empire

Kansanshi Copper Mine, Zambia.

Although the Kansangshi Copper Mine was developed earlier, its transportation is extremely inconvenient and requires the use of port cities in other countries to go to sea. Under various difficulties, the equity of the Kansangshi Copper Mine has been replaced many times, making the equity extremely complicated.

International copper prices have been soaring, and Lin Feng, general manager of Kansangxi Copper Mine, has expanded the production capacity of Kansangxi Copper Mine to the extreme.

However, while Lun copper futures have been rising sharply, spot trading of electrolytic copper has been deserted. Stimulated by the sharp rise in copper prices, copper producers have been trying to find ways to increase production capacity in an attempt to earn more profits.

As the main purchasers, manufacturing companies are shunned by the artificially high electrolytic copper prices. High copper prices have caused raw material costs to rise sharply. In order to maintain profits, they can only reduce production capacity and let downstream companies and the market share the rising cost pressure.

This has caused a strange phenomenon: short sellers in the copper futures market are retreating steadily. Buyers in the spot market would rather reduce their own production capacity than easily place orders to buy high-priced electrolytic copper, and manufacturers are unwilling to sell lower prices than LME copper. Sold at futures prices.

"Mr. Lin, Mr. David is here and waiting for you in the reception room!" Assistant Chen Wei opened the door and came in to report.

Lin Feng stood up and walked quickly to the door of the reception room. After opening the door, according to Western etiquette, he stretched out his arms and said enthusiastically: "David, if you need anything, just give me an order. I also asked you to fly over in person." …”

"There is no way, customers are God, and it is our duty to provide them with comprehensive services..." David said with a wry smile.

"David, why did you come to Zambia this time..." After a brief greeting, Lin Feng asked tentatively.

"Mr. Lin, I am here to discuss a cooperation with you on behalf of my client, a cooperation that will be of great benefit to you without any harm!" David said.

"Oh? There is no harm at all? Is there such a good thing? Mr. David, thank you for your care!" Lin Feng said in surprise.

"Mr. Lin, the price of the Lun copper futures contract has been soaring this year. Your Kansangshi copper mine has also made a lot of profits, right?" David said.

Lin Feng cried and laughed: "That's it! David, to tell you the truth, buyers are very smart now. They think the copper price is too high and are unwilling to place orders easily. They want to wait for the copper price to fall before purchasing. Our lives are not good. I don’t want it to be as easy as I imagined…”

"Mr. Lin, you don't want copper prices to fall either, right?" David continued to ask.

"That's natural. Who's worried about money hurting your hands?" Lin Feng looked at David in surprise and secretly cursed in his heart. Didn't you come all the way from London just to tell me these mindless nonsense? ! .

"So, we have a common appeal and can cooperate in depth to continue to push up copper prices..." David said in a mysterious tone.

"Cooperation to push up copper prices? How to cooperate?" Lin Feng looked at David more puzzled and asked.

""Sell" all your electrolytic copper in stock to me. I will "sell" this batch of copper to Sumitomo Trading Co., Ltd., and then Sumitomo Trading Co., Ltd. will "sell" this batch of copper to your Kansangshi Copper Mine..." David continued.

Lin Feng was stunned. He had the urge to curse. Isn't this just taking off his pants and farting? It's unnecessary!Why did you come all this way just to entertain yourself?

Lin Feng looked at David like he was a fool, and suddenly wanted to reach out and touch his forehead to see if it was hot. He was so hot that he was talking nonsense...

"Of course, Mr. Lin, I won't let your Kansangxi copper mine work in vain. The price Sumitomo Trading Company sells to you will be minus 5 US dollars per ton from the original price. You don't need to transport and load, and you can get additional through virtual transactions." Profits..." David said.

When Lin Feng heard this, he gradually understood David's intention. He wanted to create tension through false transactions and further push up the price of copper. This was similar to the trick in stock market trading where bankers traded left and right hands through linked accounts to quickly raise the stock price. same!

As long as the transaction date is modified, it is equivalent to Sumitomo Trading Co., Ltd. voluntarily paying a penalty of US$5 per ton to cancel the transaction. Even if the London Metal Exchange traces it, it will not be able to catch David's illegal and false transactions. Who would refuse such a gift? What about the good thing that comes to your door?

Lin Feng nodded, stretched out his hand and said with a smile: "David, I really can't think of any reason to reject your proposal, then I wish us a happy cooperation..."

Lin Feng quickly asked the sales department to draft an electrolytic copper sales contract. Kansangshi Copper Mine sold 3015 tons of electrolytic copper to David at an FOB price of US$5.2 per ton, with a delivery period of six months!

Half an hour later, Sumitomo Metal Mining also faxed a sales contract for electrolytic copper. The only difference was that the price changed to a CIF price of US$3010 per ton.

After the signing was completed, David returned to London and accepted an interview with the Financial Times immediately.

Under the exaggeration of the media, the short side, which had just breathed a sigh of relief because several copper mines had been registered and certified by the London Stock Exchange and could be used as physical goods for delivery, showed that they were unable to cope with the situation.

"Heping, what's going on? Why did Kansangxi Copper Mine switch sides? Isn't your Qianhai Asset Management the major shareholder?" Guo Kexin put down the newspaper in his hand and asked with a frown.

Book losses continued to expand, and Guo Kexin was already like a frightened bird, unable to bear the slightest fright!

Li Heping looked embarrassed and explained: "In order to prevent the news from leaking, except for Chen Jinhe and Chang Yonggui, the other copper mine managers do not know the inside story for the time being!"

"Now that the position is completed, should we be able to notify them of the electrolytic copper to be delivered?" Guo Kexin asked anxiously.

"The time is not yet ripe, we cannot let Binzhong Tainan discover our intentions too early!" Li Heping said in a deep voice.

"As long as we prepare for physical delivery, we will let him know sooner or later. How long can you keep it secret?" Guo Kexin argued.

"There is no way. In precious metal futures trading, the short side is inherently more restricted. As long as you are unable to complete the delivery in the end, you will lose! Now that the intention of physical delivery has been exposed, with Sumitomo's strength, it is bound to compete with us in the spot market. If they rush to buy goods in the market, they will most likely fall short in the end and let them escape unscathed!" Li Heping said in a solemn voice.

"What should we do? We now have 6000 short positions and need 150 million tons of electrolytic copper for delivery!" Guo Kexin asked.

Li Heping said disdainfully: "It's just a bluff! I don't believe that Sumitomo Corporation will require physical delivery for all the orders of more than 220 million tons they hold. Not to mention the capital cost, the storage fees and freight of the delivery warehouse are not a small amount." number."

"According to the principles of consumption and distribution centers for Lun copper delivery, Sumitomo Corporation requires delivery at Lun copper warehouses in Busan or Singapore. Once the warehouse receipts are seriously insufficient, we have to buy long orders to close the position..." Guo Kexin said worriedly!

The house leaked and it rained all night. A piece of news in the Financial Times made Guo Kexin and Li Heping feel their hearts sink to the bottom again!