China's State Reserves Bureau trader shorted copper — a $150M loss the state absorbed

Liu Qibing was the chief trader for the State Regulation Centre for Supply Reserves (SRCSR), the trading arm of China's State Reserve Bureau (SRB). Between 2002 and 2004, he made approximately $300 million in profits for the Chinese government by speculating on copper futures. But in spring 2005, he began shorting copper — and the market turned against him.

By September 2005, Liu had built a short position of 220,000 tonnes of copper at an average price of $3,500 per tonne. When copper prices continued rising, the losses mounted to approximately $150 million. Under pressure from supervisors to recover the losses, he doubled down instead of reporting them. In November 2005, Liu Qibing disappeared from public view.

The SRB initially denied knowing Liu, then acknowledged him and claimed he acted without authorization. The bureau tried to drive copper prices down by auctioning 80,000 tonnes of stockpiles and shipping 50,000 tonnes to LME warehouses in Korea, but traders did not believe the data and prices kept rising. Remaining short positions were extended into 2006 and 2007. Liu Qibing was prosecuted, and the case concluded in March 2008.