Some Traders Looking to Move Metal Out of China’s Port of Qingdao; Sources Say Metal Owners Are Inquiring About Moving Metal to Korea or Taiwan

Some Traders Looking to Move Metal Out of China’s Port of Qingdao

Sources Say Metal Owners Are Inquiring About Moving Metal to Korea or Taiwan

TATYANA SHUMSKY

June 10, 2014 7:14 p.m. ET

Metal warehouse operators in South Korea and Taiwan are receiving inquiries about moving metal held in the Chinese port of Qingdao to their facilities in the wake of an investigation into irregularities at the port, according to people at three warehouse companies.

Metal owners are looking to shift their stocks from China to warehouses in the region that are licensed by the London Metal Exchange, a person at one of the warehouse companies said. LME-licensed warehouses in Korea and Taiwan are among the facilities closest to China, reducing the cost of shipping metal from Qingdao, the person said.

Chinese authorities have launched a probe into metals-warehousing practices in Qingdao, the third-largest port in China, amid concerns that a trading company used the same warehouse receipts as collateral to secure loans at several different banks.

“People were asking about moving copper out of China and getting it into Taiwan or Korea as early as last week,” said a source at one LME warehouse operator.

The LME’s global warehouse system is the world’s largest metals-storage network, with more than 700 locations.

However, a person at a different warehouse company said the inquiries aren’t likely to result in metal leaving Qingdao anytime soon.

“This is going to be a long, dirty process,” he said.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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