Copper Users Unable to Fund Trading Positions, Telegraph Says
2006-05-18 10:48 (New York)
By Chanyaporn Chanjaroen
May 18 (Bloomberg) -- A ``clutch'' of copper consumers can't
fund their orders made through brokers on the London Metal
Exchange, increasing the risk of a default, the Daily Telegraph
reported, citing an unidentified market source.
The brokers, which weren't named, are liable for their
clients' trades and some are ``in trouble,'' the paper said.
LCH.Clearnet, which guarantees trades for London's financial
markets, said none of its 39 LME members had missed a margin
payment, the newspaper reported. LCH.Clearnet doesn't monitor
brokers' clients, the paper said.
Each trade on the LME carries a margin payment, collateral
set aside as a guarantee. LCH.Clearnet has increased margin
payments on copper fivefold this year, as prices rose as much as
96 percent, reaching a record $8,800 a metric ton on May 11.
(Daily Telegraph 5-18 B1)
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