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The State Reserves Bureau Copper Scandal refers to a loss of approximately $200 million by a single trader for the State Reserve Bureau of China at the London Metal Exchange in 2005. The incident caused copper to hit a record $4,160 a metric ton on Thursday November 17, 2005 and caused it to be reported as one of the major trading incidents in history.
The trader Liu Qibing had been active on the London Metal Exchange and had for some time taken a number of short positions in copper, borrowing the metal at current price, hoping that the prices would fall. When prices did not fall, and rose instead, Liu Qibing disappeared from public view for some time.
At first, some officials at the Chinese State Reserves Bureau denied knowing Liu Qibing and stated that the State Reserves Bureau was not even involved in short selling copper. However, other traders at the London Metals Exchange stated that they knew him as China's main metals trader. The State Reserves Bureau then acknowledged knowing Liu Qibing, but stated that he had been on leave. Later, the State Reserves Bureau announced that the trader had acted on his own, without authorization. Eventually, China started to auction large quantities of copper to drive prices down.
In 2008, Liu Qibing and his supervisor both went on trial in China, accused of breaking various regulations.