Worries over Chinese copper financing are prompting some banks to wind up deals or stop doing them altogether – and not just in the Qingdao port at the center of a probe into possible fraud, traders said on Wednesday.
The focus, mostly from Western banks, is on so-called repo deals, which give companies ready access to short-term credit in exchange for goods, three trading sources and two banking sources said. Repos is a shortening of repurchasing agreements.
The copper cash price saw a 0.4 percent increase on Wednesday, June 11, reaching $6,696 per metric ton on the LME and making it the biggest mover for the day. After a 0.2 percent increase, the copper 3-month price finished the day on the LME at $6,670 per metric ton.
The Japanese copper cash price weakened by 0.3 percent, settling at JPY 714,000 ($6,979) per metric ton. The price of US copper producer grade 122 declined 0.3 percent to $3.74 per pound. The price of US copper producer grade 102 showed little movement on Wednesday, hovering around $3.94 per pound. The price of US copper producer grade 110 saw little price change on Wednesday at $3.75 per pound.
Chinese copper prices were mixed for the day. Following a 0.3 percent rise yesterday, the price of Chinese copper bar closed at CNY 49,470 ($7,943) per metric ton. The cash price of Chinese copper is back up, rising by 0.3 percent on Wednesday to close at CNY 49,670 ($7,975) per metric ton. Following a two-day drop, the price of Chinese copper wire increased by 0.3 percent to CNY 48,650 ($7,811) per metric ton. For the fifth day in a row, the price of Chinese bright copper scrap remained essentially flat at CNY 44,300 ($7,113) per metric ton.