InfoAnda - Revolving credit: the beating heart of China's metal trade |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

Anti-Communist pastor Gauck elected German president | | 18 March 2012
Pakistan says will reopen at-risk girls' schools | 18 January 2009
Two U.S. soldiers killed, nine wounded in Iraq | | 8 September 2010

U.N. on target for Iran sanctions by mid-June: sources | | 8 May 2010

Forum Views () Forum Replies ()

Read more with google mobile : Revolving credit: the beating heart of China's metal trade |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Lawrence Summers Susan Glasser The Great Debate Steven Brill Jack & Suzy Welch Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Lipper Awards 2012 Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (0) Slideshow Full Focus Editor's choice Our best photos from the last 24 hours. Full Article Images of February Follow Reuters Facebook Twitter RSS YouTube Read RPT-UPDATE 4-Skeptical justices question Obama healthcare law 27 Mar 2012 "Dancing With the Stars" gives Navratilova the boot 27 Mar 2012 Supreme Court weighs all-or-nothing on healthcare law | 12:02am EDT Government proposes first carbon limits on power plants 27 Mar 2012 Americans angry with Obama over gas prices 27 Mar 2012 Discussed 220 Cheney recovering after heart transplant: spokeswoman 209 Black friend defends shooter of Florida teen 199 Obama makes killing of black Florida teen personal Watched Japanese tsunami boat appears near Canada Sat, Mar 24 2012 Horror hits the runway in Japan Fri, Mar 23 2012 Pope holds talks with Cuba's Castro Tue, Mar 27 2012 Revolving credit: the beating heart of China's metal trade Tweet Share this Email Print Related News Copper steady after rally, China demand weighs Tue, Mar 27 2012 Copper surges after Bernanke sparks risk-on rally Mon, Mar 26 2012 Copper up in thin volume; slow China demand weighs Wed, Mar 21 2012 Copper sinks as China slowdown fears escalate Tue, Mar 20 2012 Copper rises as U.S. recovery eclipses China woes Mon, Mar 19 2012 Analysis & Opinion The rich versus the seething masses How to stop the Whac-a-Mole of insider trading Related Topics World » China » 1 of 2. A worker loads copper cathodes into a warehouse near Yangshan Deep Water Port, south of Shanghai March 23, 2012. Credit: Reuters/Carlos Barria By Melanie Burton SHANGHAI | Wed Mar 28, 2012 3:06am EDT SHANGHAI (Reuters) - In a dilapidated high rise in a residential district of Shanghai sits the beating heart of China's physical metal trade. The Wu Mao building, encircled by dusty bicycles and razor wire, houses around 500 companies trading copper, zinc, nickel, lead, aluminum and silver. China is the world's top consumer of metals and around 80 percent of the industry's transactions are done out of Shanghai -- 90 percent of which take place in Wu Mao, locals estimate. Severe credit restrictions have compressed margins to such an extent that residents say a rolling third of Wu Mao companies go bust every six months -- but there is still a year-long queue to get through the door. "For the industrial metals business, credit is very important -- the purpose of companies coming into this building is credit," said a senior executive at a company with a unit trading copper and zinc in the building. Wu Mao hosted the Shanghai Futures Exchange in the 1990s, and as hedging units of smelters from the coastal Jiangsu and Zhejiang provinces moved in, the industry began to take shape. Now, a home at this prestigious address can ease access to loans for China's metals industry, where small private enterprises in particular have been choked by Beijing's stranglehold on credit. At Wu Mao, some businesses are units of large domestic smelters or metal product makers, like Aluminium Corp of China Ltd (Chinalco) or Jiangxi Copper Co Ltd, whose roles are to hedge price risk on the domestic market, through trading warehouse receipts and electronically via ShFE. "Most of the companies here are not only trading companies, but units of bigger companies. This department doesn't make money, but the rest of the group makes money," said an executive in his early thirties at a large copper trader. Other companies are boosting turnover to improve balance sheets and to better get credit. In January, an executive from domestic trading firm Ocean Resources, which has an office in the building, told Reuters its company traded warehouse receipts for as little profit as 10 yuan per 60,170-yuan tonne of copper in order to help buttress its balance sheet. Many have made a little money and are hoping to make a lot more by betting on the commodities markets. "Speculators, maybe they have 5 million yuan and they want to make a lot of money quickly so they can go into physical commodities," one Wu Mao veteran told Reuters in Shanghai. Those who successfully punt on prices can then move into real imports and exports, to grow an independent trading or logistics business. "If successful with making money, they get a balance sheet and go into real business -- if they are lucky," he added. RICH KIDS Margins may be slim now, but for Mr Zhang and his girlfriend, a young couple who met trading zinc in the building, the ride around dusty Shanghai streets comes in the comfort of a Mercedes luxury coupe. Many of the employees in the small private firms that dot Wu Mao are in their 20s and 30s, much younger than the cadres at the state-owned shops. Known as "Fu Er Dai", or second-generation rich, they are from families that have found success in textile or manufacturing industries in the nearby provinces, local traders said. "Wu Mao is full of speculators but it is the speculators here that have significantly contributed to the market's liquidity," said the second executive. This army of self-traders at Wu Mao, armed with limited capital by normal industry standards, will flock to any profitable trades; be it imports, spot transactions for stocks in bonded inventories or domestic futures, he said. "In the eyes of the foreigners ... they can't understand how we are able to make money from these trades and may find it shocking that we are willing to take all these risks," he added. "But if we were to stick to the Western way and go by the book when it comes to trade financing, we won't survive." In a bid to crank up credit creation, China's central bank cut the amount of cash banks must hold in reserves in February, boosting lending capacity by an estimated 350-400 billion yuan ($55.6-$63.5 billion). But Wu Mao traders expect little of that to trickle down to their business. "There will always be a place for companies like this because there is not enough credit," the first executive said. "Also, Beijing focuses on growth. This kind of business pays taxes and contributes to the economy so they like it." (Additional reporting by Fayen Wong; Editing by Michael Urquhart) World China Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Wednesday, 28 March 2012
Pope honors patron saint, heads to meeting with Castro |
Analysis: French shooting case shows counterterrorism limits |
Dubai says Islamists trying to weaken UAE via Twitter |
Militia clashes in southern Libya kill nearly 50 |
South Sudan oil field bombed, Sudan says hopes to avert war |
Peru president's kin causes headaches for leader |
Briton held in Somalia on suspected links to rebels |
RIM delays analysts' meet till BlackBerry 10 launch |
Deals increase with need for more network security |
U.S. willing to share airwaves with commercial users |
Amazon, B&N make concessions for Potter ebooks |
Bully documentary to land in theaters unrated |
Lionel Richie goes country on new album 'Tuskegee' |
Annan says Syria accepts peace plan, U.S. skeptical |
Pope to end Cuba trip with mass, Fidel Castro meeting |
Afghan soldiers arrested over Defence Ministry plot: NYT |
Italy PM Monti downplays Spain contagion risk |
Australia open to U.S. spy flights from Indian Ocean island |
Revolving credit: the beating heart of China's metal trade |
China allows detained rights lawyer first visit in two years |
Jail may await Afghan women fleeing abuse, rape: HRW |
Analysis: French shooting case shows counterterrorism limits |
Face time with Facebook CEO stirs concerns on Wall Street |
Apple offers refund to Australian buyers of new iPad |
Nokia to sell Windows phones in China from April |
Amazon Kindle store buy buttons vanish for hours |
House Republicans push info-sharing cyber bill |
Sharp to announce deal with Sony on Sakai plant |
Twitter coverage of court gets struck down |
Lorax statue stolen from California home of Dr. Seuss |
Dancing With the Stars gives Navratilova the boot |
Madonna's MDNA receives lukewarm welcome from critics |
Amazon, B&N make concessions for Potter ebooks |
Lindsay Lohan lands guest spot on Glee |
Insight: In secret unit, clues to top Israeli duo's chemistry |
Italy police seize 1.1 billion euro Gaddafi family assets |
Iran says expects nuclear talks on April 13 |
Human rights groups welcome Polish report on CIA prisons |
Gunmen kidnap Saudi diplomat in Yemen |
Rights group accuses U.S. of abuses on Mexican border |
Libya militias agree ceasefire after deadly clashes |
Livni ousted as leader of Israel's opposition party |
Google proposes Android revenue for Oracle: filing |
China to boost intellectual property rights: Xinhua |
Cyber-centre to shield EU against online crime |
EU's Almunia to decide on Google probe after Easter |
Amazon Kindle store buy buttons vanish for hours |
Titanic in 3D cranks up experience, director says |
Singer Robin Gibb has surgery, cancels commitments |
The Avengers to close Tribeca film festival |
Susan Boyle musical a hit with fans and critics |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph		BlogMeter 1.01