has reduced lending to China’s Tsingshan, one of the world’s top nickel producers, while also paring back credit to other customers in Europe and Asia after a review of risk, sources close to the situation said.
JPMorgan is one of the biggest banks in metals and its paring back of finance is sending a chill throughout the sector, two of the sources said. In March, JPMorgan had the largest exposure of about 10 banks and brokers to large short positions, or bets on prices falling, held by Tsingshan. During a suspension of trading on the LME, the Chinese company agreed a stand-still deal with its financiers allow it to gradually reduce its positions.
“There’s been a general tightening in finance for the metals sector,” said Marc Bailey, chief executive of LME broker Sucden Financial, who declined to comment about JPMorgan and Tsingshan.