Mexican iron ore trade

Commodity trade Finance in Mexico

Commodity finance aims to provide short-term, self-liquidating finance facilities to a range of trading companies from the mid-sized specialist product trader to the globally-integrated major trading houses.

These facilities may be secured or unsecured depending upon our perception of the creditworthiness of the borrower and the structure of the business we are undertaking. Our major business lines comprise steel and base metals, energy products and agricultural commodities. Generally we target business where there are liquid terminal markets for the underlying commodity, but we will also work selectively with market leaders that trade less liquid commodities.

SMBC group's trade finance team for commodities operates on a global basis providing comprehensive solutions for the finance of international trade. We employ a team of professionals, all of whom have multi-year experience in commodity finance and can offer our customers a range of traditional or structured commodity finance solutions using a full range of products, including:

  • Pre-Export Trade Financing
  • Issuance of Letters of Credit, such as Documentary and Standby Letters of Credit
  • Warehouse and Receivables Financing
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The panic hasn't even started!

As ordinary citizens with no power over the levers of policy, we watch from the sidelines, and weep. The whole global economy has tipped into a downward spiral. Trade and output are contracting at rates that outstrip the leisurely depression of the 1930s. Debt deflation has simply washed over the drastic measures taken by governments everywhere.
Judging by the latest Merrill Lynch survey of fund managers, investors have a touching faith that China is going to rescue us all and re-ignite the commodity boom

Get ready for higher long term interest rates

by NiteCrawlerofTruth

Higher U.S. interest rates will be due to:
1. Higher inflation; cheaper dollar. T-buyers are demanding a higher
interest rate to compensate for inflation and the falling dollar.This
inflation is caused by higher world commodity prices and is outside
control by the Fed Reserve.
2. Foreign sovereign funds are pulling out of U.S. Treasuries. The
Chinese economics minister and OPEC spokesman and others have already
announced this pull back Foreigners, who own more than half of our $9.5

Random House Hot Commodities : How Anyone Can Invest Profitably in the World's Best Market
Book (Random House)

Commodity finance being done by Trading Houses  — Spend Matters
And banks fund these companies through trade lines, just like they fund so many hedge funds, factors, and others now interested in trade receivables. See – Shadow Banking Market grows and grows and Commodity Trade Finance – Still the Banks' Domain.

Routledge The Impact of China on Global Commodity Prices: The Disruption of the World's Resource Sector (Routledge Studies in the Modern World Economy)
Book (Routledge)
INTERNATIONAL MONETARY FUND China: Competing in the Global Economy
INTERNATIONAL MONETARY FUND Fund and China in the international Monetary System (Hardcover)
INTERNATIONAL MONETARY FUND India's and China's Recent Experience with Reform and Growth (Procyclicality of Financial Systems in Asia)

Popular Q&A

What does trade credit mean in terms of finance?

In terms of finance the term trade credit refers to credit is given for a certain term that is agreed upon between the borrower and the lender. If the amount of payment due is not paid by the agreed upon term then the lender has the ability to sell the goods to pay back the debt.

What does it mean to discount a letter of credit, in trade finance?

When you have a letter of credit, which is really just a credit contract called "paper" in the trade.The reliable of getting paid off (like a credit score) determines the discount rate.

Most companies dont have the finances to carry their own paper so they sell it to investment firms at a discount rate.

It will never apply to borrowing money but if you buy a $2000 car and sign for $4000 at 18% interest the dealer will sell the paper to an investor at 70% of face value.

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