London. Metal Futures Market!
Due to the time difference, it was already past 1:00 PM when Li Yunbao received the telegram sent from Hong Kong.
According to the trading rules of the local futures market, the afternoon session had already begun.
That morning, Li Yunbao and his team had gotten their first taste of the frenzy among investors in this venerable financial empire. Almost from the opening bell, prices for various metals here had surged significantly.
The price of steel had skyrocketed by 2% in less than an hour, while copper and aluminum saw even steeper increases, reaching 4% and 5% respectively.
Even so, those investors seemed completely unfazed; they continued to pour money in, frantically snapping up futures contracts for various metals, adopting a stance that clearly sought to overwhelm the market with capital.
Soon, news broke in the futures market that investment firms controlled by several major European conglomerates had all entered the fray.
Moreover, these major conglomerates shared a common objective: to go long on metals in the futures market.
Under these circumstances, the prices of short-term contracts for metals such as steel, copper, aluminum, tin, and silver soared.
By the time the market closed that morning, the price of steel had risen to 183 pounds per ton.
The price increases for copper and aluminum were even more dramatic, reaching 1,386 pounds and 1,258 pounds per ton, respectively.
Other metals also saw significant gains, particularly silver, which rose by 8% in just one morning and continued to climb.
In short, the entire London metal futures market seemed to have suddenly entered a frenzy, exploding without warning.
Given how utterly baffling today’s situation was, Li Yunbao and his team spent the entire morning filling only small batches of futures orders, rather than gobbling up massive volumes as they had done before.
However, upon receiving a message from Li Futiao just moments ago, Li Yunbao felt reassured. He immediately instructed the trading team to go all out and aggressively purchase futures contracts for steel, copper, and aluminum!
With Li Yunbao’s orders in hand, Zhang Qiusheng and the others no longer had any reservations and began trading with reckless abandon.
In order to snatch orders from the financial titans, they kept raising the purchase price of the futures contracts.
By the time the market closed that evening, the price of steel had reached 198 pounds per ton—a full 32-pound increase from the 166 pounds per ton at which Li Yunbao and his team had initially entered the market.
6:00 p.m.!
Upon returning to the suburban estate, the group skipped dinner and, following Li Yunbao’s orders, gathered in the conference room.
Seated at the head of the table, Li Yunbao looked at the exhausted group and immediately said, “Everyone, counting today, it has been eight days since our team arrived in London. Over the past week, we have quietly snapped up futures contracts for various metals, and everything has gone smoothly!”
“However, starting today, massive amounts of capital have entered the market. From now on, we’ll face far more competitors in our operations. Everyone needs to be mentally prepared for this!”
At that moment, Zhang Qiusheng spoke up: “The price increases for these metals and commodities today seem somewhat unusual. We must get to the bottom of this. If someone is setting a trap, the consequences of us charging in blindly could be disastrous!”
Li Yunbao glanced at him and said, “That’s not something we need to worry about. Our job is to strictly follow orders and convert all our available funds into futures contracts and spot positions.”
“Yes!”
“How many contracts have we purchased in total, and how much capital do we have left?” Li Yunbao asked again.
As the head of futures operations, Zhang Qiusheng replied immediately, “So far, we’ve purchased 780,000 steel contracts, 80,000 copper contracts, and 140,000 aluminum contracts!”
“We’ve spent 10.1 billion pounds so far, leaving us with 7.7 billion pounds remaining. However, this is based on a 10% margin requirement. If the situation in the futures market changes, we may need to increase our margin deposits…”
Before he could finish, Li Yunbao said calmly, “None of that is our concern. Starting tomorrow, continue buying futures contracts—especially steel contracts. As long as the price doesn’t double, don’t stop!”
“Yes…”
Li Yunbao then fixed his gaze on Zhou Xinghua and asked, “Brother Xinghua, how are things on your end?”
Zhou Xinghua replied immediately, “Things aren’t looking too optimistic on my end either. Several brokerage firms have reported today that massive amounts of capital have flooded the steel market, competing with them for orders. As a result, the brokers we’ve secured are all demanding price hikes!”
“No problem. We’ll raise our prices to match the market rate, but be careful—companies that have already signed contracts might try to renege!” Li Yunbao said.
Zhou Xinghua replied immediately, “That’s unlikely. When we signed the contracts with them, we specifically included clauses regarding liability for breach of contract.”
“If they breach the contract, the penalty will be much higher than the current increase in steel prices. They won’t—and won’t dare—do that!”
“That’s good to hear!” Li Yunbao said.
Zhou Xinghua continued, “While I’ve been buying up steel spot goods these past few days, I’ve spoken with quite a few local steel merchants and noticed something rather unusual!”
“What’s going on?”
“I suspect the recent rise in metal prices here might be related to war!” Zhou Xinghua said, making a startling claim.
“War? Are you saying there’s going to be a war here?” Li Yunbao asked, looking astonished.
“It’s a possibility. From what I’ve learned, there’s a territorial dispute between the UK and a country in South America. Tensions are running high, and an outbreak of war isn’t out of the question!”
Zhou Xinghua continued, “Furthermore, massive amounts of capital have flooded into the stock and futures markets today, and spot trading has been affected as well. I’ve noticed that this capital isn’t just snapping up steel—it’s also buying up copper, aluminum, cotton, pharmaceuticals, and oil, among other commodities. All these signs really do give the feeling that a major conflict is on the horizon!”
Zhang Qiusheng agreed, saying, “I have that same feeling too, though I’ve been focused on the futures market these past few days and haven’t been following current events here, so it doesn’t seem as obvious to me as it does to Manager Zhou.”
Li Yunbao, however, had a different reaction—one of both surprise and delight.
He was surprised because, if Zhou Xinghua and Zhang Qiusheng’s speculation was true, their boss and good friend Li Yi had clearly anticipated this long ago. How did he know that a war was coming?
The delight came from the fact that if war did break out, the prices of these metals and commodities would inevitably rise. Since they had positioned themselves so many days in advance, making a profit was a sure thing.
With that in mind, Li Yunbao said in a low voice, “Let’s not talk about that. Whether there’s a war or not has nothing to do with us. Let’s focus on the investment first!”
“In the coming days, we’ll continue to increase our positions in steel, copper, and aluminum. Do you have anything else to add?”
Zhang Qiusheng immediately replied, “Young Master, there’s something I’d like to consult you about, but…”
“You’re in charge of futures investments. Speak your mind—no need to beat around the bush!” Li Yunbao said.
Zhang Qiusheng nodded and said, “Young Master, this investment is being funded in two batches: one from Hong Kong and the other from our local branch.”
“Given that futures contract volume isn’t very ample right now, should we prioritize securing funds for that side?”
With his sharp mind as a top-tier trader, Zhang Qiusheng had already figured out the source of this massive investment of over 3 billion pounds, and he also knew that this investment operation was being orchestrated behind the scenes by Li Yi, the investment guru.
Furthermore, he knew the company was also preparing to get a piece of the pie, having set aside 200 million pounds.
If there were enough contracts, that wouldn’t be a problem.
But with the influx of massive capital, the futures market was clearly facing a situation where there were too many buyers and not enough contracts, so they had to make some tough choices.
Li Yunbao clearly understood what he meant, but without a moment’s hesitation, he said, “Prioritize the funds for Hong Kong Island. I don’t want to have to say this twice!”
“Yes…”
……….