Posts tagged 'inventory financing'

China and the magic financing (soy)beanstalk


Did you think commodity collateral shenanigans had been rumbled and stopped by China’s authorities? Read more

Let’s count the copper with dust on it

Michael Robinson over at the BBC’s World Service has been investigating high global commodity prices in a series entitled Bubble Trouble?

In this week’s episode Robinson looks at the copper market and in particular the scale of potential copper shenanigans that may or may not be going on in the market. Read more

Please wait 10 months for your aluminium. Thank you

There’s never a dull moment in the metals markets these days.

The latest developments come via Metal Bulletin which reports that backlogs at some LME aluminium warehouses are now so large that warrant holders are considering taking legal action just to take delivery of their own stocks. Read more

China’s copper collateral – and covert credit

Whatever happened to China’s amazing copper collateral shenanigans?

Goldman Sachs said last month that China’s central bank may have cracked-down on the scheme, which saw Chinese corporates use copper as collateral for new loans. Meanwhile, attention turned to other commodities that could potentially be used by China’s companies in a similar way. Read more

Copper, the re-export factor

We’ve already referred to the latest Reuters Metals Insider report on Thursday, but somehow we feel that the following is worth a special mention of its own.

That is, what happens when the government attempts to rein in innovative Chinese financing schemes like those using copper as collateral? Read more

Chinese bonded warehouses’ copper inventories still rising

Having flagged the problem in the first place, it was natural for Standard Chartered to follow up on the state of China’s bonded warehouse copper inventories this month.

And what they found — surprise, surprise — was that stocks in April were still on the rise: Read more

And now for Chinese zinc shenanigans

FT Alphaville has already alluded to the fact that it isn’t just copper that has been subject to Chinese inventory financing shenanigans.

Other commodities, especially base metals, are supposedly also being used for such purposes. Read more

Chinese ‘copper financing’ got even more popular this month

So says Standard Chartered bank in their latest Metals Weekly research.

The bank was among the first to bring attention to the fad of commodity-backed financing in China, and now has this update: Read more

Standard Bank says Chinese copper market cause for concern

We’re calling it the “The Great Chinese Commodity-as-Collateral Financing” fiddle.

That is, the purchase of commodities like copper on deferred payment terms for the sole purpose of raising cheap financing for reinvestment in higher yielding assets. Read more