Metals financing under pressure due to probe

Jun 03, 2014 | 01:41 PM | Andrea Hotter

Tags  Qingdao port, credit crunch, China shipments, copper, aluminum, alumina, iron ore, bank financing

NEW YORK — Western banks and commodities warehousing companies knee-deep in Chinese repurchase deals should be worried.

Authorities in Qingdao—a seaport in Shandong province that is home to vast tonnages of aluminum, copper concentrate, alumina and iron ore—have blocked some shipments as they investigate the allegedly fraudulent use of warehouse receipts multiple times to raise financing (, June 2).

The scenario has played out in non-London Metal Exchange warehouses for years, which is why banks will only finance commodities’ storage in China up to a certain limit.....

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