as early as the 16th century, the Sumitomo family grew stronger and stronger because it started and operated a copper mine on Shikoku Island, and became the official copper supplier in Japan, mainly serving some powerful families in Japan at that time, including the Tokugawa shogunate, which ruled Japan for more than 2 years from 163 to 1868. At that time, the head of the family proudly declared that Sumitomo Trading Company was the largest copper exporter in the world.

in the mid-19th century, the Japanese market was gradually opened to the west, and Sumitomo Trading Co., Ltd. also developed more widely in the fields of steel smelting and steelmaking. By the beginning of the 2th century, the Sumitomo family had rapidly developed into the third largest financial chaebol in Japan.

During the 193s and World War II, some monopoly groups with political influence became the main followers of Japanese militarism, and Sumitomo Corporation was no exception. During this period, the family centralization of Sumitomo Consortium became more obvious, and most of its industries were concentrated in the hands of Sumitomo family. By 1937, the 16th generation of Sumitomo family had mastered 9% of the total share capital of the consortium.

after Japan's defeat, the chaebol were disintegrated and reorganized into enterprise groups under the restriction of the United States. The Sumitomo family's political and economic influence in Japan has also been greatly weakened. However, with the recovery of Japan's economy after the war, Sumitomo Consortium made a comeback and grew stronger and stronger. Since then, Sumitomo Corporation has participated more extensively in international trade activities in the fields of metals, machinery, petroleum, chemicals, food and textiles, and has become the core enterprise of Sumitomo Consortium and one of the four largest traders in Japan.

In fiscal year 1995, Sumitomo's global sales amounted to 16 trillion yen, amounting to US$ 146.8 billion.

In June 1996, the Sumitomo family faced a historic catastrophe. Moreover, this disaster is precisely the magic weapon that once brought the Sumitomo family a wealth of money-copper rush. The perpetrator was Bin Zhongtai, the chief trader of the Ministry of Nonferrous Metals Trading.

Mr. Tong

Bin Zhongtai's two nicknames are very intriguing, one is "1% Mr.five" and the other is "Hammer". The former is a respectful name for his ability by insiders, while the latter is depicting his character.

insiders call him "1% Mr.five" because Sumitomo Nonferrous Metals Trading Department, led by Tadao Hama, controls as much as 5% of the global copper trading volume. It can be seen that Hamanaka's outstanding achievements in international copper futures trading also reflect the great influence of Sumitomo's trading decision on the international steel market.

"Hammer" is derived from yasuohamanaka, the English translation name of Binzhongtai Male, because the pronunciation of Binzhongtai Male in English is very similar to "Hammer". However, the reason why this nickname can be called is mainly because it reflects the hammer-like hard character of Binzhongtai male in the transaction. This character contributed to his success, but perhaps it was this character that contributed to his failure.

in 197, at the age of 22, Mr. Binzhongtai joined Sumitomo Trading Company. Since then, he has been in the international copper market for more than 2 years. It is extremely unusual for Hamanaka to keep this identity for a long time. According to Japanese business insiders, Japanese trading banks usually adjust their traders once every two to three years. This shows that Hamanaka's ability in the transaction is extraordinary.

In the late 197s, Tadao Hamada finally had the opportunity to participate in metal futures trading on the London Metal Exchange. At that time, he was mainly engaged in tin and nickel futures contracts.

at first, he was not famous, just an ordinary clerk. But in just a few years, Hamanaka began to show his heroic qualities. By 1983, his copper trading volume had reached 1 thousand tons every year. By the end of 198s, he had occupied a place among the major international copper futures companies, and it was then that "1% Mr.five" and "Hammer" were called out.

However, no one may have thought that Tadao Hamada would make such an "unprecedented" super mistake. After he brought losses of up to $4 billion to Sumitomo Trading Company, people have completely changed their views on him. Akiyama Tomiichi, president of Sumitomo Trading Co., had to admit that it was a mistake to reuse Hamanaka, and announced the dismissal of Hamanaka. He was very depressed and said,

"In my impression, he is very self-controlled and very logical, so I trusted him and appointed him as the chief metal trader. But I am very disappointed now! "

Hammer Character

Mr. Hamada's mistake was to use the company's name to run copper futures trading in a private account. It was his "hammer" character that caused him and Sumitomo a huge loss of $1.9 billion.

Mr. Bin Zhongtai holds a long position in copper futures trading, that is, he buys a large number of copper futures contracts, which is undoubtedly profitable when the copper price rises. Mr. Bin Zhongtai once secretly enjoyed this. However, since 1995, the international copper price has been falling again and again. On January 2, 1995, the international copper price was as high as $3,75 per ton, but it fell below $2,6 per ton at the beginning of 1996. The continuous decline in copper prices has not only caused the profit of Binzhongtainan's long position to be exhausted, but also caused quite serious losses.

In fact, according to David King, president of London Metal Exchange, as early as the end of 1991, they had noticed Tadao Hamada's behavior and warned him several times.

in November, 1991, Jin received a letter from Schleier Kaide, president of dlt brokerage company, which revealed that Binzhongtai male asked him to illegally supply false transaction certificates to him, and suggested that Binzhongtai male should be investigated.

The president in charge of trading has summoned Tadao Hama and another trader more than once. At the end of 1991 and in 1993, the London Metal Exchange expressed several concerns about the size of Sumitomo's position in the copper market of the exchange.

in October and November, 1995, someone realized the unreasonable price difference between monthly copper futures contracts and asked the board of directors to conduct a detailed investigation. After having a clear understanding of the positions held by each customer in various contracts and the ownership of warehouse receipts in the exchange warehouse, the London Metal Exchange set up a special committee composed of professionals who have no connection with each other and have no fundamental conflicts of interest, and discussed how to handle the operation. This special committee includes famous lawyers and senior supervisors in the industry.

However, it is Tadao Hamada's "hammer" character that pushes him out of the abyss again. He naively believes that with its strong financial strength, it will certainly curb the strong momentum of continuous decline in copper prices. The poor performance of fundamentals is no longer important in his increasingly bloated mind, so under his control, the copper price of the London Stock Exchange was slightly stable at the end of 1995.

The abnormal fluctuation of copper price has once again attracted the attention of the securities and futures regulatory authorities in Britain and the United States, and the behavior of Hamanaka's attempt to manipulate the market has gradually been exposed. The dual pressure of the regulatory authorities' tracing and the huge losses in the transaction made Binzhong Tainan unbearable. In May, 1996, the copper price in London had fallen below $2,5 per ton, and rumors about Mr. Bin Zhongtai's forced resignation were also circulating everywhere. People in the industry are worried that once such a prominent figure who plays a huge supporting role in copper prices withdraws, how can international copper prices stand up? As a result, stimulated by these rumors, a large number of panic selling caused copper prices to plummet by about 25% in the following weeks.

On June 5th, 1996, the scandal of Bin Zhongtai's unauthorized participation in copper futures trading gradually became public in new york. On June 24, 1996, after Sumitomo Corporation announced a huge loss of $1.9 billion and dismissed Hamada Tadao. The price of copper has dropped from $2,165 per ton 24 hours ago to the lowest point of $1,86 per ton in two years, and the plunging trend is staggering.

according to the price at that time, the loss of Sumitomo Trading Co., Ltd. was about 1.9 billion US dollars. However, the subsequent panic selling attacks expanded the loss of Sumitomo Trading Co., Ltd.' s long position to 4 billion US dollars.

who is the opponent?

after the incident, people are wondering who made Sumitomo's money, because this is not a general business curiosity, but the whereabouts of these funds will determine to some extent who will play a greater role in the copper futures market in the future.

Futures trading is a zero-sum transaction, and some people will lose money and others will gain. So who did Sumitomo's huge loss-making funds flow to?

At present, there are mainly some international funds that are short-selling in international copper futures, including American financial giants. Soros's Quantum Fund, which was world-famous for "defeating" the British government in the pound crisis in the 198s, Robinson's Tiger Fund, Canadian billionaire Blake and at least one well-known European metal trader.

Some traders believe that these funds have more or less controlled the overall situation now. However, how much they have benefited from this turmoil and the impact they can have on copper prices are still little known.

However, Soros's spokesman strongly denied it in new york at that time, and said that Soros was not involved in this market, and had no business dealings with Hamanaka. In this way, who made the money from Sumitomo Trading Co., Ltd. suddenly became a fog-after all, it is better to be careful against Sumitomo Consortium with deep pockets, and don't tell anyone if you make money.

at that time, although the international copper price was basically stable, the scenery had gone, and traders generally believed that once Sumitomo closed its position, the copper price would continue to fall. However, both American Trust Bank and American and Australian traders are speculating that Sumitomo may have already closed its position, so the market need not worry too much. However, metal traders in Japan and Asia are cautious and skeptical.

In short, once Sumitomo Trading Company's strong bullish position in international copper futures is shaken, the international copper price is bound to continue to weaken, what's more, in recent years, the production speed of copper in the world is much higher than the growth of consumption. Therefore, some traders predict that the international copper price will fluctuate between $1,75 and $1,95 per ton in the second half of that year, and it is just an extravagant hope to return to more than $2, per ton.

after the sumitomo incident, the president of the company, tomiichi Qiushui, still vowed in the announcement that sumitomo will maintain its normal operation and continue to actively and extensively participate in the international copper and other commodities trading. Moreover, despite the huge losses, Sumitomo Shangdu's financial system and financial strength are still strong. However, Standard & Poor's (Asia), a world-renowned credit rating agency, has lowered the short-term credit rating of Sumitomo Corporation from a-1+ to A-L, and said that it will continue to conduct credit investigation on Sumitomo Corporation and its two branches. Moody's credit rating agency in new york also issued a statement after the Sumitomo incident, and planned to lower Sumitomo's senior debt rating AA-3.

tomiichi Qiushui also promised that Sumitomo Corporation would actively cooperate with the US Commodity Futures Trading Commission, the British Securities Investment Commission and relevant Japanese departments to further investigate this matter. The London Metal Exchange also held an emergency meeting, and drew up many emergency measures to stabilize the trading. The financial departments in new york and Japan also took actions one after another, trying to control the market turmoil caused by the Sumitomo incident to a minimum.

Actually, Sumitomo's situation is only representative of many powerful institutions. Some powerful institutions and large households often get carried away after earning a few times, thinking that "I have money, and the market is my call". In order to manipulate the market, these large households sometimes even join hands to enter the market together. However, the long-term trend of the market is not entirely determined by the size of funds, especially the copper and aluminum market. The domestic copper and aluminum market is affected by the international copper and aluminum market, and the international copper and aluminum market is also affected by the global economic situation and economic cycle. Even if individual large households have the power to manipulate and control the international copper market in the short term, in the long run, if their entry direction is contrary to the international fundamentals, the final outcome is tantamount to throwing an egg at a stone.

The Sumitomo incident tells us that the futures market is not a casino, and the fundamental driving force that determines the price trend is the relationship between supply and demand of commodities, and any attempt to manipulate the market will eventually be punished. For our small and medium-sized investors, when the market price is crazy or seriously distorted, we should lead a clean life and avoid risks.