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Tuesday, July 29, 2014

Goldman unit eyes foray into China amid metals financing scandal

http://www.reuters.com/article/2014/07/29/us-china-warehousing-goldman-exclusive-idUSKBN0FY09S20140729


Goldman Sachs Group Inc's metals warehousing unit is exploring its first foray into China, and privately held C Steinweg has expanded capacity there, sources said, as a financing scandal in a major Chinese port fuels a scramble for market share.
The alleged scam - in which a Chinese trading firm is suspected by local authorities of fraudulently using a single cargo of metal as collateral for multiple loans - has shaken the confidence of banks and merchants in Western metals storage firms that rely on local agents to oversee warehouse operations.
It has intensified a battle between new entrants and entrenched rivals in the multi-billion dollar business of securely storing the world's commodities in China, the world's biggest producer and user of base metals.

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