Here Comes the Copper

Cargoes at Qingdao moved to LME warehouses
Some copper cargoes held at China's Qingdao Port were being shipped to more regulated LME warehouses, industry sources said, as banks and trading houses took precautions over a probe into metal financing at the world's seventh-busiest port.

Qingdao probe could trigger deliveries into LME, China as finance availability falls – Macquarie

LORD COPPER: Qingdao – a step back in time?
Why would speculators be selling? Well, take away the speculative metal imports to back loans which are used elsewhere, and suddenly maybe Chinese demand looks considerably weaker.

That would not be bullish for prices.

On the other hand, though, some traders have suggested to me that the whole metal-for-loans deal is so important that the problem will be contained and collateral will be properly reallocated.

I'm not totally convinced by that; I think this has the potential to stifle business going forward.

Commodities are not exactly flavour of the month with the banking fraternity at the moment, and to see that such an (alleged) fraud can be perpetrated despite all the collateral managers, cargo inspectors, documents specialists and so on will, I suggest, lead to a serious reassessment.

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