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The founder of one of China’s biggest copper trading firms has reportedly been detained by the police for questioning, according to unnamed sources who spoke to Bloomberg.
He Jinbi is the founder of Maike Metals, which is the largest copper trading house in China. The firm ran into trouble last year amid a liquidity crunch related to the Covid lockdowns in the country.
As a result, creditors went to court to get their money back from the company. To date, according to Bloomberg, Maike Metals is almost entirely inactive, when before it used to supply a quarter of China’s total copper imports.
According to Bloomberg sources, He had been detained in his home province of Shaanxi. The report notes that detention does not necessarily lead to charges. Sometimes executives get detained to help with investigations into others, Bloomberg also said.
Meanwhile, a decline in the demand for copper from China earlier this month pushed prices to the lowest in four months, with the LSE benchmark dipping below $8,000 per ton. Nikkei noted in a report on the price movements that China accounts for 60% of global copper demand, with much of what it uses going into the real estate sector.
As a result of the real estate construction slowdown this year in China, demand for the versatile metal also declined, pushing prices lower.
That’s bad news for the energy transition as mining industry executives reiterated their warning that there is not enough new copper supply to power the transition. Not only this but some have pointed out that even if prices rose, that will not be enough to safeguard the transition.
“Now it’s not just price. It’s these other factors that really are going to limit how quickly we can develop supplies,” Kathleen Quirk, president of Freeport-McMoRan said, speaking at the FT Mining Summit last week. “What may end up happening is that this [energy transition] gets extended out longer.”
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com