Goldman Sachs’ (GS.NYSE) metals warehousing unit is exploring its first foray into China amid a metals financing scandal, in which local authorities suspect a Chinese trading firm of fraudulently using a single cargo of metal as collateral for multiple loans, Reuters reported. Western warehousing companies already operating there, including Glencore unit Pacorini Metals (GLEN.LON) and Trafigura-owned Impala, are looking at ditching local agents in favor of setting up their own domestic operations to oversee warehousing assets directly, seven sources who work for warehousing companies or use them to store their metal said.
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