- Bloomberg
A RECLUSIVE Chinese billionaire whose prescient gold trades turned into an eye-catching windfall has now become the country’s biggest copper bull, amassing a bet worth nearly US$1bil in a market jolted by escalating competition between the United States and China.
Bian Ximing, who made an early fortune in plastic tubes before seeking a quiet life in Gibraltar, has made waves over the last two years with his investment in Chinese gold futures, betting on what he argued would be a global effort to reduce reliance on the dollar and counter inflation worries.
His fund came in just as bullion was beginning a record-breaking ascent – and made roughly US$1.5bil in profit in the process, according to Bloomberg calculations.
Today, as a trade war and potential truce roil markets, Bian and his brokerage, Zhongcai Futures Co, are responsible for the largest net long position in copper contracts on the Shanghai Futures Exchange, according to people familiar with the matter and bourse data.
After 10 months of purchases, at the end of Friday they were long nearly 90,000 tonnes in copper futures, counting Bian’s own investment and funds he manages through Zhongcai – enough to dwarf any peers.
It’s a position that the 61-year-old tycoon, who personally accounts for the lion’s share of the Zhongcai investment, intends to maintain, the people said, even after geopolitical ructions prompted some of his investors to pull out – an expression of confidence in the metal and in the economy of the world’s largest consumer.
The people asked not to be named as company discussions are private.
“It’s a quite unique copper position that is worth following,” said Li Yiyao, a vice-president of Cofco Futures Co’s Shanghai North Bund division.
“It reflects a very long-term, bullish sentiment on the metal based on fundamentals – which differs from the usual mid or short-term strategies we see in the market.”
She added that Bian’s counterintuitive moves during the worst of the trade turmoil, standing firm as many others exited, were particularly remarkable.
A handful of larger-than-life figures have dominated Chinese commodities trading since the economic boom began two decades ago, transforming the industry.
Bian ranks alongside Xiang Guangda, founder of nickel pioneer Tsingshan, or magnates like He Jinbi, the missing founder of Maike Metals International Co.
Though his methodology has differed from that of traditional physical traders, his rivals and managers describe the austere Bian as having a deep understanding of a market that has become increasingly difficult to read for those outside China.
The billionaire, described by those who know him as unassuming and direct, has also stood out for his seclusion, running his team of Chinese managers and the brokerage he took over two decades ago via video call from the southern tip of the Iberian peninsula.
Since moving from eastern China more than a decade ago, attracted by warmer weather and proximity to European assets, Bian makes few trips home to visit his investment team and factories. —Bloomberg
Alfred Cang writes for Bloomberg. The views expressed here are the writer’s own.
