2013-05-30

Chinese media: the death of copper financing is greatly exaggerated

Chinese financial media says the death of copper financing is greatly exaggerated and blames Goldman Sachs, saying the bank is looking to short copper.
Copper financing Times reported Goldman Sachs accused of ulterior motives unspeakable end

In essence, the traders argue that what's going on is arbitrage between the onshore and offshore dollar and yuan exchange rates, in addition to interest rate differentials, and copper is merely one of many options in this trade. The price of copper will determine its use: if prices start falling, traders may be unwilling to sit on inventory. However, none of this deals with the use of copper as collateral for loans.

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