It is reported that to help ease local steel mills capital strains, Shenzhen Development Bank Hainan Branch, Sinotrans Guangxi Company and Hainan Luqiao Haikou Steel Trading Market Management Co Ltd reached a cooperation agreement recently to jointly build a new financing platform for local steel producers.
The move comes as local steel mills, trading houses and down-stream users aim to take advantage of the chance that China Securities Regulatory Commission has lately approved the trading of wire rod and rebar futures in Shanghai Futures Exchange, to hedge off steel price risks. Meanwhile, the construction of a slew of big projects in local also generates demand for steel products, offering perfect timing for them to speed up development and optimize product structure.
As per the agreement, local steel trading firms can acquire financing from local SDB on the mortgage of three kinds of assets prepayment, stockpiles and accounts receivable while steel trading market acts at stockyard for spot products. And Sinotrans Guangxi Company, as the supervisor is to provide convenient and efficient monitoring service for the other three partners.
To enhance the speed of examination and approval, SDB Haikou Branch opens up specialized green channel. Meanwhile, the branch also sets up a mortgage center.
