Chinese Trader's $20 Million Pile of Russian Copper Goes Missing

financialpost.com:

(Bloomberg) — A giant state-owned Chinese commodities trader is nursing losses after a shipment of copper from Russia worth nearly $20 million went missing, reigniting fears over fraud in the often secretive market for buying and selling raw materials.

Wuchan Zhongda Group Co., which had sales of 580 billion yuan ($80 billion) in 2023, bought 2,000 tons of refined copper from a Russian smelter that should have been delivered last month. It never made it to port, according to people with knowledge of the incident.

Instead, the metal was listed as much cheaper granite and has likely ended up in Turkey, according to the records of the shipping line that handled the consignment, the people said, declining to be identified discussing a sensitive matter.

Staff from the Chinese company have visited Russia to investigate what happened, although they’ve been unable to determine where the smelter is even located, the people said. 

Wuchan Zhongda, based in the eastern province of Zhejiang, declined to comment.

The episode, while unlikely to have global repercussions, is the latest blow to international metals trading and its reputation. The sector has repeatedly found itself tangled in scams, including tales of fake warehouse receipts and containers filled with painted rocks. Trading behemoth Trafigura Group last year fell foul of a missing metals scheme that cost the firm over half a billion dollars.

Favorable Terms

Russia is one of the world’s biggest copper suppliers and China is the largest consumer. Western sanctions imposed on Russian commodities in the wake of the invasion of Ukraine are expanding commerce between the two nations, with Chinese buyers enjoying discounts and other favorable payment terms to keep trade flowing.