Trafigura Seeking to Limit its Liability in Chinese Copper Warehousing Probe

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The Chinese metal and copper warehousing probe has caused multinational Trafigura to ask a UK court to limit its liability in the case. Trafigura is also launching a new metals exchange for small buyers in India.

Trafigura Beheer BV’s warehousing unit asked a UK court to determine its liability in metal contracts it issued to a Citic Resources Holdings Ltd. trading arm at China’s Qingdao Port, where officials are probing whether metals were used multiple times as collateral for loans Bloomberg News reported.

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Trafigura’s Impala Warehousing and Logistics (Shanghai) Co. sought to affirm contractual limits of the warehouse certificates for Citic Australia Commodity Trading Pty Ltd. for about 2,482 metric tons of copper, according to a June 18 claim filed in London. Impala received an interim injunction on June 27 restricting the Citic unit from making claims against Impala outside the UK concerning the warehouse certificates.

Banks and trading companies are checking their exposure to metals stored at Qingdao where public security officials are investigating if companies controlled by Singaporean national Chen Jihong used the same batches of commodities as collateral for loans from several lenders

At CNY 51,500 ($8,310) per metric ton, Chinese copper bar moved up 1.0 percent on Thursday, July 24, the day’s biggest change. The Chinese copper cash price rose 1.0 percent to CNY 51,700 ($8,342) per metric ton. The price of Chinese copper wire saw little movement at CNY 50,790 ($8,195) per metric ton. The price of Chinese bright copper scrap remained essentially flat at CNY 44,300 ($7,148) per metric ton.

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The cash price of primary Japanese copper increased 0.1 percent to JPY 750,000 ($7,387) per metric ton. The price of US copper producer grade 122 flattened at $3.89 after two days of improvement. The price of US copper producer grade 102 steadied at $4.08 per pound following two-days of increases. Following a two-day rise, the price of US copper producer grade 110 flattened at $3.89.

On the LME, the copper 3-month price saw little change in its price yesterday at $7,070 per metric ton. The cash price of primary copper saw little price change on Thursday on the LME at $7,060 per metric ton.

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