Glencore's trading partner in China is in a liquidity crisis
Sale of Refined Copper: Mining Group Reduces Offer to Principal Broker Maike
Ibrahim Al-TarikMay 8, 2025
Mining giant Glencore is facing disruption at its largest partner in selling refined copper to the Chinese market as Maike Metals International, a powerful trading house, grapples with a liquidity crunch.
The slowdown in China's economy and the downturn in the real estate market have hit several domestic trading houses and led to a series of scandals, including copper shortages in warehouses.
Glencore sold about 600,000 tons per year of high-purity copper to China through Maike before the Xi'an-based trading group ran into liquidity problems, according to people familiar with the matter. That amount represents one-fifth of Glencore's sales of copper metal and concentrates last year, according to the annual report.
Glencore's sales volumes through Maike have recently been reduced, one of the people added.
Maike was Glencore's largest local intermediary in the marketing of refined copper, used in all aspects of electrical wire and cable, and accounted for 80 percent of sales volume in the country.
But Maike ran into trouble earlier this year, and its founder He Jinbi admitted last month that the company is struggling with liquidity problems. He told the Financial Times last week that Maike is selling assets and considering a broader restructuring to weather the crisis. The company is also working with creditors who have agreed to roll over existing loans.
Founded by He in 1993, Maike has become one of the key bridges between major international trading houses and Chinese consumers, with sales of Rmb 160 billion ($22.6 billion) in 2021.
The trading house used imported metal to trade with banks Raise funds with a repayment period of usually 90 days, which He then put into the Chinese real estate sector, traders report. According to a report by China Lianhe Credit Rating, a Beijing-based rating agency, the company had Rmb 6.65 billion in real estate investments at the end of 2020, which is around 60% of its illiquid assets.
Now that China's real estate sector has slowed, Maike is saddled with bad debts that the company is struggling to repay to its creditors. The largest of these were the Xi'an branches of Bank of Beijing and Industrial and Commercial Bank of China, company filings show as of mid-2021.
As of the end of June 2021, lenders had granted Maike credit lines of about Rmb 10.6 billion, of which the company reportedly had drawn down Rmb 9.6 billion. The company also had three bonds with an outstanding value of RMB 3.3 billion, according to data provider Wind Information. In the recent interview, he said that the company has outstanding bank debts of about RMB 7 billion.
London-based ICBC Standard Bank has moved offshore some copper stocks used as collateral for its loans to Maike, according to two people familiar with the matter. JPMorgan, another of the company's financiers, has liquidated inventory in bonded warehouses at ports inside China, they added.
Foreign lenders have become increasingly nervous about financing commodity trades in China after a series of problems at trading houses.
The credit crunch has made sourcing physical copper in China more difficult, and copper stocks in Shanghai have fallen to their lowest level in a decade.
Other major copper producers, including the world's largest miner BHP and Chilean company Codelco, have also paused sales to Maike to address liquidity problems, commodity trading executives say.
Foreign corporations including Glencore, Mitsui, Trafigura, Codelco and Aurubis supplied 30 percent of Maike's annual imports in 2020, according to China Lianhe Credit Rating. A person familiar with the matter said Trafigura did not do business with Maike this year.
Glencore, BHP and JPMorgan all declined to comment. ICBC Standard and Codelco did not respond to requests for comment.
Maike's He said the group is actively selling fixed assets and shares to replenish cash and reduce debt, using the phrase "breaking arms to survive" - meaning sacrificing parts of the company to save it.
Commodity traders expect state-owned companies to provide funding lines to steer the company through the liquidity crisis. Maike's He told the FT that the group is discussing an investment with state groups in the central city of Xi'an, but gave no details.
In August, Maike set up a joint venture with a local government financing vehicle backed by Xianyang City, Shaanxi Province.
A copper trader at a state-owned futures trading company said a Shaanxi-affiliated company is considering buying shares and injecting cash into the company because it is so important to the local economy.
When asked about Maike's heavy reliance on short-term financing, which uses metals as collateral, he replied, "The entire private sector has been struggling with liquidity this year and we're no exception."
A veteran copper trader said: "It has to do with whether they are politically too big for the province to fail. I hope they cannot come back. These people are the last of a dying breed of Chinese traders importing copper use for financing.
