CESCO – INTERVIEW: No Chinese cancellations amid financing fears, Codelco says

Volatile copper prices and concerns that a clampdown on shadow banking will lead to a flood of metal into China's domestic market have not resulted in cancellations from Codelco's customers, its ceo told Metal Bulletin.

"We have had no cancellations from our customers. There are issues on the financing front, for sure, and perhaps there is some market sentiment that the carry of stocks doesn't pay any more," Thomas Keller said. "The devaluation of the local currency could impact short-term supply, there's always that fear. But it doesn't change dramatically the supply demand equation for copper," he added. Concerns over yuan volatility resulted in the unwinding of commodity backed financing trades, while China's first corporate bond default stoked concerns that the country's economy was in meltdown. A move to limit China's shadow banking sector, which provided loans to thousands of traders and merchants, often in exchange for copper as collateral, also heightened...


Andrea Hotter

April 08, 2014

23:03 GMT