* Says unable to secure more than 100,000 tonnes of alumina
* Metal has a value of about $43 mln at current market
* Adds to worries about losses from financing scam at port
(Adds detail on port, investigation)
SHANGHAI, June 18 Chinese commodities trader
CITIC Resources Holding Ltd said on Wednesday that
more than 100,000 tonnes of alumina stored at Qingdao port was
missing, deepening fears that firms exposed to a metals
financing scam at the port could face big losses.
The Chinese port, the world's seventh busiest, has been at
the centre of an investigation looking at whether a private
metals trading firm issued multiple warehouse receipts so that
the same metal cargo could be used multiple times to obtain
The alumina CITIC had been unable to secure has a value of
around $43 million based on current market prices.
The probe has rattled global metals markets, reflecting
market fears about business practices in China and worries that
the probe could extend to other ports and prompt a crackdown on
using metal as collateral for finance.
"The company has been notified that in the enforcement of
the sequestration orders obtained by the group, the Qingdao
court has been unable to sequester about 123,446 MT (metric
tonnes) of alumina which the group has stored at Qingdao port,"
the firm said in a statement to the Hong Kong stock exchange.
CITIC Resources said it had title to 223,270 tonnes of
alumina and 7,486 tonnes of copper stored at the port pending
payment by and delivery to buyers.
CITIC Resources is the commodities trading unit of China's
biggest and oldest state-owned financial conglomerate company,
CITIC Group Corp. Singapore sovereign wealth fund Temasek
Holdings also holds an 11.46 percent in the unit.
The Chinese trading firm said it would conduct its own
investigation to establish why the court had been unable to
enforce its sequestration order in full.
CITIC said it did not have information on the current status
of an investigation by Qingdao authorities and was not yet able
to accurately assess the impact of the alleged fraud on the
The use of commodities as collateral to raise finance is
common practice in China and is not illegal. But duplicating
receipts to repeatedly mortgage the full value of an asset is
fraud and could leave more than one creditor holding claims to
the same collateral.
Panic over the scandal has meant that some copper cargoes
held at China's Qingdao Port have been shipped to more regulated
London Metal Exchange warehouses, industry sources said.
Global banks including Standard Bank Group and a
part-owned unit of Louis Dreyfus Corp,
Singapore-listed GKE Corp. have warned of potential
losses from the scandal.
Standard Chartered has said it is reviewing metals
financing to a small number of companies in China and
acknowledged there are issues in China around commodity.
(Reporting by Fayen Wong and Melanie Burton in SYDNEY; Editing
by Mark Bendeich and Ed Davies)