Citic Resources, a Chinese state-owned commodities trader, said on Wednesday that it had been unable to locate more than 100,000 tons of alumina at a port in northeast China that is the focus of a commodities fraud investigation.
The company said it had secured a court order to sequester, or secure, about 223,000 metric tons, or 253,000 tons, of alumina, also called aluminum oxide, and about 7,500 metric tons of copper to which it has legal title at the port of Qingdao. However, it has not been able to locate more than half of its alumina, some 123,000 metric tons. The material is worth about $43 million, according to Reuters.
The announcement by Citic Resources, which also produces oil and coal and is a unit of the state-owned conglomerate Citic Group, is likely to raise further concerns about how companies in China use — and potentially abuse — imported commodities such as copper, aluminum and iron ore to obtain short-term financing. The Chinese authorities are investigating whether one such importer in Qingdao, Dezheng Resources, acted with its subsidiaries to fraudulently obtain loans by pledging and re-pledging the same stockpiles of metals as collateral to multiple banks.
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