Where is 'The Hat'? The $144 Million Disappearance Rocking Global Metals Markets
The world of commodities trading is used to volatility, but it wasn’t a market crash that sent shockwaves through China this week—it was a vanishing act.
Xu Maohua, a legendary dealer known across the trading floors of Guangdong as "The Hat," has reportedly fled China. Left in his wake is a staggering 1 billion yuan ($144 million) hole in the balance sheets of some of the country’s biggest metals firms.
The Domino Effect
The crisis erupted when a chain of unsettled contracts for copper and other industrial metals suddenly snapped. As "The Hat" disappeared, so did the payments owed to a network of traders and state-backed entities. $AFT
State-Backed Fallout: SDIC Commodities Co., a massive state-owned enterprise subsidiary, finds itself at the center of the storm, facing potential lawsuits from suppliers who were never paid.
The Shadow Game: This isn't just about one man fleeing; it’s a spotlight on "circular trading." Regulators suspect these firms were trading the same batches of metal back and forth to inflate their numbers—a house of cards that collapsed the moment Xu walked away. $UAI
Why This Matters Now
With global metal prices already on a rollercoaster in early 2026, this scandal has alarmed top regulators. The State-owned Assets Supervision and Administration Commission (SASAC) is now launching a "scorched earth" audit to see how many other trading desks are hiding similar "phantom" deals. $MYX
For years, "The Hat" was the middleman everyone trusted to keep the gears turning. Now, his disappearance has exposed a systemic risk that could lead to a massive tightening of credit across the Chinese commodities sector.
