Buy! Sell! Run!

To the club of hapless traders who have squandered fortunes in global commodities markets—think Nick Leeson, who bankrupted 232-year-old Barings Bank in 1995, or the Sumitomo Metals trader who blew $1.8 billion in 1996—add a new member: Liu Qibing of Beijing's State Reserve Bureau (SRB), whose wrong-way bet on copper prices may cost the Chinese government tens of millions of dollars.

According to copper traders who dealt with him routinely over the past several years, Liu had taken "short" positions in copper in recent months—borrowing the industrial metal at current prices to sell to others, hoping the price...

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