* Chinese state-owned bank sends team to Qingdao port-source
* Banks, traders, warehouse officials comparing paperwork
* Investigation into metal financing hits copper prices
* Concern among banks over broader ramifications (Updating to add details about Citigroup in paras 12-14)
By Melanie Burton and Polly Yam
SYDNEY/HONG KONG, June 5 Global trading houses and banks are scrambling to check on their exposure to a probe into metal financing at China's Qingdao port, as concerns intensify that a crackdown on commodity financing could hit trade in the world's top metal buyer.
The investigation at the world's seventh-largest port is looking into whether single cargoes of metal were used multiple times to obtain financing, according to industry sources.
This means different banks and trading houses were holding separate titles for the same metal, they said.
The inquiry has revived worries about the impact of China's deepening credit crunch on its metal imports, many of which pile up in warehouses to be used as collateral.
"Now the banks are all flying down to the port and literally, together with the warehouse people and the traders, are physically counting the stocks," said a source at a global trading company who visited the port this week.
"When we were there we did hear a couple of traders holding the same title. One was saying that one (cargo) belongs to me the other trader said it belongs to him. They had the same document."
Concern over what is happening at Qingdao has unsettled metal markets, although for now the investigation is known to centre on a single trading company and firms related to it.
It remains unclear if it signals the start of a wider investigation by Chinese authorities into metal financing, although checks so far with officials at several other major Chinese ports such as Ningbo have said operations were normal.
Reflecting concern among banks, Standard Chartered has suspended new metal financing to some customers in China, three sources familiar with the matter said.
The bank, which has been monitoring the situation at Qingdao, said on Thursday: "Specific to this incident, Standard Chartered is reviewing metals financing to a small number of companies in China."
At least one other Western bank with operations in China is reviewing its exposure to copper and aluminium financing, a source with direct knowledge said.
New York-based Citigroup Inc is among banks financing copper on behalf of clients at the port, according to people familiar with the situation.
In a statement to Reuters, the bank said: "To the extent Citi's clients are affected, Citi will work closely with the relevant authorities, warehousing companies and clients to resolve the matter."
The risk of losses likely varies between banks, depending on whether they lent to a trading firm believed to be directly involved with any alleged fraud, or to clients who owned metal at the port and are able to cover any losses, said a person who had been briefed on the U.S. bank's situation.
Concern over the situation has extended to domestic banks. A Chinese state-owned bank has sent a team from head office to Qingdao to investigate trade financing problems, said a source with direct knowledge of the situation.
Copper prices in London fell to their lowest in more than three weeks on Wednesday, partly on worries that bankers would restrict access to credit for financing deals after the probe. Prices steadied on Thursday.
Most metal financing deals in China are done outside exchanges, and in those deals warehouse receipts are used as proof of ownership of metal. This is agreed typically by a bank or a trading house with a warehouse.
In contrast, in some other developed financial centres there is greater oversight. The London Metal Exchange licenses warehouses and monitors stocks held in exchange inventories.
A spokesman for Trafigura said this week that the trading house was following events at the port and gathering information.
On Wednesday, Standard Bank Group and a part-owned unit of Louis Dreyfus Corp, Singapore-listed GKE Corp , also warned of potential losses.
"Standard Bank Group is not yet in a position to quantify any potential loss arising from these circumstances," it said.
IRON ORE RECEIPTS
Authorities at the port in northeast China have not officially confirmed an investigation, and have said exports and operations were running normally.
But Xinhua news agency said the port had said it was investigating whether iron ore warehouse receipts were fraudulently used multiple times to raise finance from different banks.
Trading and warehousing sources also said some shipments of copper and aluminium into the port had been disrupted, relating to the investigation.
Traders estimated 80,000 tonnes of aluminium and 20,000-45,0000 tonnes of copper with a combined value of $285-$460 million could be affected by the investigation.
According to traders and warehousing sources, port authorities at Qingdao's Dagang wharfs have been examining cargoes of metal tied to a trading company and linked firms.
Qingdao Ports International, the main operator of the Port of Qingdao, and its controlling shareholder raised a combined HK$2.92 billion ($377 million) in an initial public offering last week, according to sources. The stock is due to debut on Friday. (Additonal reporting by Manolo Serapio in Singapore, Polly Yam, Xiaowen Bi and Hongmei Zhao in Hong Kong, Ruby Lian in Shanghai, Susan Thomas in London and David Henry in New York; Editing by Ed Davies, Mike Collett-White and Bernard Orr)