WEEK IN BRIEF: Banks’ roles in commodities; LME data and initial margins under LME Clear; Rio results; Brazil aluminium

It was another busy week for the Metal Bulletin journalists, with the LME, market movements and banks’ positions in commodity markets catching our attention.

Here, we take a look back at some of the key articles from the past week.

Credit Suisse has been looking to build its client base in commodities trade finance, even as it closes down its trading and sales operations, the head of the bank’s commodity trade finance division told Metal Bulletin’s Mark Burton.

But is it worthwhile for banks to be involved in commodities markets, and if so how? If Credit Suisse and Deutsche Bank are pulling out, what do others have to do to pull in?

Check out our series of articles on banks and their role in commodities here.

Meanwhile, in exchange news, LME brokers said this week that initial margins on some of the most liquid spreads traded on the London Metal Exchange will rise sharply once the Hong Kong-owned exchange launches LME Clear on September 22.

And the LME released its first commitment of traders’ report. Here’s a snapshot of the key data.

And here are the key points we picked up.

Earnings at the LME, the world’s leading metal exchange, fell on two rising costs: staff and the lawsuits it faces.

Rio Tinto has, meanwhile, cut almost $1 billion in costs from its aluminium operations, ceo Sam Walsh said, as he told the market that earnings rose by one-fifth year-on-year in January-June.
 
And Brazil “brought life to the aluminium market” again by making it less expensive to bring aluminium into the country. It has exempted a substantial volume of material from the 6% import duty.

Market feedback on the move is here.

Meanwhile, China’s imports of copper dropped for a third month to 340,000 tonnes, possibly because of reduced financing demand after the Qingdao scandal.

On that same topic, Chinese state media confirmed that the deputy head of Qingdao customs authority, Bian Peiquan, died from unnatural causes and an investigation continues. For a reminder of Qingdao events so far click here.

Metal Bulletin’s Janie Davies, meanwhile, revealed that CHEMK Industrial Group is working with Russian authorities to find a way to complete the purchase of the Serov Ferroalloys Plant from ENRC after it was blocked on anti-trust grounds. For the complete story, click here.

And concerns spread across markets as geopolitical risk came to the fore. US President Obama vowed to use air power in aid of a besieged Christian minority in Iraq. The authorization of military action in Iraq weighed on all Asian financial markets.

Our teams across the world have been monitoring the impact on metal markets of political tensions.