China funds become new force in global commodity trade

By Henry Sanderson in London and Lucy Hornby in Beijing China’s Shanghai Chaos investment fund is named after the pioneer of chaos theory Edward Norton Lorenz, who coined the term “butterfly effect” to describe seemingly random yet connected events That may be an apt description for the global metals markets, where moves made by hedge funds in China are increasingly felt across the globe. “Over 40 years ago US meteorologist Edward Lorenz definitely could not have known that his theories would change a Chinese person’s investment ideas, and allow him to make money,” Shanghai Chaos founder Ge Weidong said in a 2009 interview with Chinese media, explaining why he chose the name of his fund. Chinese funds are becoming the money to watch in the global commodities markets. Often founded by investors who cut their teeth in the country’s chaotic futures markets of the 1990s, they are said to be behind last week’s precipitous fall in copper. Dropping 0 in a single hour during the Asian morning, the move sent shares in Glencore, the world’s third-largest copper miner, to their lowest level since the company went public in 2011. Shares in Chilean copper producer Antofagasta sunk 7.3 per cent. By … continue reading

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