I'm in the county town, and you say I'm a big shot?

Chapter 656 "Let's see whether the East Wind prevails over the West Wind, or the West Wind prevails over the East Wind!"

Seeing Fang Qingye's affirmative answer, Li Baoming chimed in, "This matter has really ruined us copper companies."

"You mean the price of copper is falling, right?" Fang Qingye looked at him.

"Yes, not only futures prices, but spot prices have also plummeted! Yesterday, the average spot price on the Yangtze River fell to $4825 per ton, a 15.8% decrease compared to the same period last year!"

"Moreover, I have the latest data." Zhu Yunlai took a document from the briefcase next to her and handed it to Fang Qingye.

"Copper inventories at the London Metal Exchange rose 47% in a single week, setting a new record; copper inventories at the Qingdao bonded area reached 85 tons, causing port turnover problems; Goldman Sachs just lowered its copper price forecast to $4000 per ton, 17% lower than the current price!"

"If that's really the case, it's terrifying," Chen Jinghe of Zijin Mining sighed deeply.

"Mr. Zhu, do you want to go long?" Fang Qingye understood his thoughts.

"Yes," Zhu Yunlai answered confidently, then smiled and said, "President Fang, you're an expert in futures trading, do you think it's feasible?"

“It will be extremely difficult. Your competitors are Goldman Sachs, Morgan Stanley, UBS, and the internationally renowned ‘Red Kite’ hedge fund,” Fang Qingye answered decisively.

Red Kite Funds is a leading global commodity hedge fund focused on the metals and mining sectors.

"Hehe, see? That's what you call professional," Zhu Yunlai said in a joking tone.

"Furthermore, you're operating against the market trend!" Fang Qingye looked at Zhu Yunlai: "Currently, domestic economic data remains sluggish, especially in the real estate and manufacturing sectors. Although the central bank recently introduced measures such as interest rate cuts and reserve requirement ratio reductions, let me ask you, Ms. Zhu..."

Fang Qingye leaned forward slightly, her voice lowering: "With your extensive network and rich experience, do you think the government will launch a large-scale stimulus plan this year? Like the four trillion yuan stimulus in 08?"

Zhu Yunlai picked up her teacup and took a sip of water, but did not answer.

There was no answer, so the answer was clear.

"These short sellers believe that as the world's largest copper consumer, any slight movement in our country directly determines the fate of copper. Moreover, they judge that our country's 'super demand cycle' for commodities has completely ended."

"Despite the price drop, major copper mines around the world, especially in Chile and Peru, have not reduced production on a large scale in order to maintain cash flow and market share. Market supply is sufficient and inventories are accumulating. Is this the case for the companies of the two CEOs?" Fang Qingye said, looking at Li Baoming and Chen Jinghe.

The two chairmen exchanged a glance and nodded.

"Moreover, the strengthening of the US dollar, coupled with the sharp drop in the domestic stock market, has only made things worse," Fang Qingye said.

"So you think Red Kite and the others are right, and we're going against the market trend?" Zhu Yunlai also looked at Fang Qingye.

"Yes, in the second half of this year, the copper industry, whether in futures or spot markets, will not see much improvement. Anyone who trades stocks or futures knows that no one should go against the trend!" Fang Qingye's voice was not loud, but his tone was very firm.

“But we have no choice but to do it.” Zhu Yunlai sighed softly. “We must keep the price of copper futures on the London Metal Exchange (LME) above $5000 per ton to stabilize the spot price.”

"There are three purposes for doing this: First, to prevent major copper exporting countries to my country, such as Chile and Peru, from falling into economic difficulties and to prevent Western capital from taking the opportunity to acquire high-quality resources at low prices. Second, Chinese copper companies, such as Jiangxi Copper and Zijin Mining, cannot continue to lose money and must be profitable. Third, to prevent the collapse of the domestic commodity futures market—you can see that the stock market is currently plummeting."

Fang Qingye also fell silent.

Just after the Lujiazui Forum concluded, the domestic A-share market experienced a sharp decline, especially last Friday, which was dubbed "Black Friday." The Shanghai Composite Index plummeted by 7.4%, marking the largest single-day drop since 2008, with over 2000 out of 2761 stocks hitting their daily limit down!
This is very embarrassing for the regulators; the market reacted this way right after the meeting.

"Eat, eat, the food's getting cold." Li Baoming said with a smile, noticing the tense atmosphere in the room. "Right, we'll eat whenever we want. The emperor doesn't need hungry soldiers."

Fang Qingye smiled and picked up her chopsticks, and the atmosphere became relaxed again.

After finishing their meal, the four of them went to the tea room next door to rest and have tea. "President Fang, do you think we can achieve our goals?" Zhu Yunlai asked again.

Fang Qingye pondered for a moment before saying, "Personally, I think it's unlikely that copper futures prices will reverse, but it's still quite possible for them to stay above $5000 per ton."

"method?"

"It's actually quite simple. The first thing is to build expectations. We need to make domestic and foreign capital optimistic about the long-term positive outlook of the Chinese economy and the continued strong demand for copper. Of course, we also need to introduce certain market-rescue policies, such as the State Reserve Bureau openly purchasing copper on the market to boost market confidence."

The State Reserve Bureau, officially known as the National Material Reserve Bureau, is responsible for formulating national strategic material reserve plans and organizing the implementation of plans for storage, rotation, and utilization.

"Furthermore, and more importantly, we need to invest real money in a planned long position, going against Western funds and investment banks like Red Kite, to create a short squeeze," Fang Qingye said with a smile.

"This is a truly tough battle; it remains to be seen whether the East Wind or the West Wind will prevail!"

Zhu Yunlai fell into deep thought after listening.

After drinking tea for half an hour, Fang Qingye said goodbye and left, saying that he had to rush back to Nanxin because his wife was about to give birth and he couldn't stay out there too long.

"Alright then, I won't disturb President Fang's family matters any longer. Congratulations on the birth of your daughter or son!" Zhu Yunlai said with a smile.

"Thank you."

After saying goodbye to the three people, Fang Qingye called Yue Kai, and the two hurriedly went downstairs.

After Fang Qingye left, the three continued drinking tea. Zhu Yunlai asked with a smile, "What do you think of Fang Qingye?"

“He’s young, but he’s shrewd and has a keen eye.” The speaker was Li Baoming from Jiangxi Copper Industry. “President Zhu, you don’t know, the year before last, Jiangxi Copper Industry had some trouble and had to stop production for rectification. As a result, Fang Qingye found out and made a fortune by going long on Shanghai copper in advance, leaving us in a very embarrassing situation.”

As he finished speaking, Li Baoming gave a wry smile.

Zhu Yunlai chuckled and said, "Don't worry, Fang Qingye is on our side this time. If we're trading Shanghai copper, he might not listen to my advice, but when it comes to LME copper futures, he insists on always pointing the gun outwards."

Chen Jinghe, however, was thinking about something else: "Fang Qingye said to send the State Reserve Bureau? I'm worried we'll repeat the mistakes of 2005." Li Baoming said.

In 2005, a major copper futures battle took place in the international futures market (also known as the "National Reserve Copper Incident"). This was a battle between the State Reserve Bureau and international capital on the London Metal Exchange (LME), but it ultimately ended with the State Reserve Bureau suffering huge losses.

Zhu Yunlai pondered for a moment before saying, "This kind of important matter is not something that CICC can decide. However, we can report this suggestion to higher authorities. Fang Qingye is right. Creating public opinion and making empty pronouncements may work for ordinary investors, but it has no effect on seasoned old foxes like Red Kite. Instead, they will think that we are just bluffing."

The two nodded in agreement.

"As for funding, let's all contribute, whether it's state-owned capital or private capital," Zhu Yunlai said, standing up and looking outside.

Through the glass window, the sunlight on the Huangpu River shimmered like flowing gold. But to the onlookers, this light appeared as the color of another metal—copper.

(End of this chapter)