We noted last night that Iron Ore futures prices were in free-fall as the vicious circle of China's commodity-collateral-backed shadow banking system unwind hits home
amid fears of contagion from the Chaori Solar default. The first
domestic Chinese corporate bond default has retail investors running
scared as surprise spreads that the local government did not come to the
rescue. The deleveraging is now spreading to copper prices (remember
the massive cash-for-copper schemes of last year) as borrowers are
forced to sell to meet cash calls which in turn drops copper prices,
reducing collateral values and tightening credit conditions even more. This is the biggest copper price drop since Dec 2011...(more)Please share this article
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