The Wall Street Journal reported that, as Chinese officials continue to investigate allegations that some traders illegally pledged copper and iron as collateral to more than one lender, delays in clearing imports could disrupt trade for the base metals. According to the Journal, some say the investigations could cause imports to weaken, while others say that industrial demand for iron and copper will mitigate any disruptions.
As quoted in the publication:
The official probe so far appears confined to Qingdao, and another nearby port, neither of which is a major player in commodities financing compared to larger hubs like Shanghai. The probe is unlikely to discourage many traders who still want to import metal for use as collateral in legitimate financing plans, CRU Group’s Ms. Li said.
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