Skip to comments.U.S. scrap copper trade fears defaults from China
Posted on 03/16/2014 3:36:31 PM PDT by Sawdring
Reuters) - At least one U.S. scrap copper trader has suffered "large" losses after a buyer in China defaulted on a deal in the past week, one of the first signs that sinking prices and tightening credit are taking a toll on the physical market.
The customer walked away from a deal that had been guaranteed by a letter of credit, said a market participant who was familiar with the matter, but withheld the identity of the companies involved to protect business relationships. China is the world's biggest copper consumer.
(Excerpt) Read more at reuters.com ...
Copper wire theft is endemic in Fresno.
Drug addicts who have depended upon copper thefts to support their habits will be devastated.
an unseemly amount of China’s credit markets are loans collateralized by warehoused copper. No one really seems quite comfortable with how good the recordkeeping is, either, meaning there is a risk that the same lot of copper may be collateral on many different transactions.
Oh well, I guess we will reload brass rather than sell it.
You mean it may have been "re-hypothecated," like some suspect the gold in US hands, and in JP Morgan's vaults may have been?
As opposed to those collateralized with Obama promises?
Well, the Congress passes the budgets, and they’re constitutionally authorized to do so, which means that we the people are very much on the hook for those debts, which as a lender to the US Gov’t I am happier with than I would be with some copper that may or may not be in a warehouse somewhere in China. So, yes.
If the deal was “guaranteed by a letter of credit”, how did the trader take a large loss?
Maybe we’ll start to see some .22 lr??
Nobody but an idiot will sell to the Red Chinese on credit. Letters of Credit on a mutually trusted bank (Hong Kong or Singapore) is the way to go if you want to deal direct.
because the letter is likely worth less than a letter form the GOPe condemning something.
The Constitution is just a bunch of promises to be waved by our ‘expert’ President. It doesn’t mean what it once meant. Ignoring it to the point of doing serious damage to US and our friends is his hobby. He’d love to see us default. If pushed, I’d cite the end of the 14th and declare him a de facto “insurrection or rebellion against the United States.” Declare HIS debt invalid; honor the rest of the debt, which should then be manageable.
one word: Prozac
Name one product boosted by the Obama economy?