London 07/09/2016 - Market participants expect very little impact on metal supply and flows from the financial collapse of South Korea's largest shipping giant, Hanjin.
Hanjin Shipping last week went into receivership in South Korea after its creditors rejected a restructuring plan - the seventh-biggest shipping company in the world filed for bankuptcy protection under chapter 11 in many countries to avoid its fleet being seized.
"It's big news for the Korean economy but not big news for metals," a trader at a South Korean metals trading firm said.
At least 11 vessels are reportedly stranded in various ports in China and Singapore while many more were denied access to terminals, sources estimated. Hanjin's ships can carry some 10,000 40-foot containers, according to news reports.
"Less than 10 percent of the containers carry metals," a metals warehousing source in Asia said. "Vessels already sailing on the water will arrive at destination and can be discharged. The only problem is for transhipment cargos which are being held at various ports including Shanghai and Singapore. But even these will get released eventually - there might just be some delays."
Most stranded vessels containing metals were from the West and doing a stopover in Shanghai or Singapore before heading to South Korea, he noted.
There are mor than 430,000 tonnes of metals stored in LME-listed warehouses in South Korea as well as at least an additional 400,000 tonnes of aluminium stored in off-warrant locations in the country.
The South Korean government has offered to step in to provide 100 billion won ($91 million) in long-term loans at low interest rates while parent company Hanjin Group also said it would raise 60 billion won. Chairman Cho Yang-ho said he would contribute another 40 billion won from private funds.
(Editing by Mark Shaw)