Coal Message Board - Msg: 33742781

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Gold/Mining/Energy : Coal

COAL 22.84

+2.3%

Nov 6 4:00 PM EST

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From: The Barracuda™	3/5/2022 4:03:46 PM
	of 2027

Credit Suisse Who is getting the margin calls? Market participants that are long commodities either in the ground or in transit and want to lock in a price by shorting futures. These include every commodity producer in the world including Russia, and every major commodity trading house, respectively. Again, we do not know if this is the case, but it’s reasonable to wonder if Russian commodity producers are experiencing margin calls now, and if they have the resources to pay – could they choose not to pay because their sovereign’s FX reserves were seized? We are not saying they will, but this is a risk one needs to consider. As for the commodity traders, which are suffering a correlated surge in commodity prices (Russia and Ukraine export pretty much everything imaginable), margin calls can be funded by drawing on credit lines from banks, issuing CP, or swapping FX. One lesson from the March 2020 liquidity crisis was that corporate credit lines (which have a low drawdown assumption according to Basel III) can be drawn across all industries and across all geographies at the same time in a pandemic, plus2.credit-suisse.com

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