The problem of Chinese customers defaulting on previously agreed deals will also lead to large losses for some importers.
Kidnap alleged in China dispute [FT]
A British scrap metal company has accused Chinese customers of abducting its chief trader for ransom in a case that underlines the challenges of doing business in China.
Goldarrow Metals alleged that Anil Srivastav was seized from a Shanghai airport this month and held for days in a small hotel in the eastern port city of Ningbo.
The company said it was forced to send shipping documents worth $350,000 to Ningbo Yibao Import and Export, a customer, to secure Mr Srivastav’s release after local police and British consular officials refused to intervene.
The affair comes amid mounting friction in the international scrap metal trade caused by a slump in commodity prices. Tens of thousands of tonnes of imported copper and aluminium scrap are reported to be sitting in Chinese ports after local companies defaulted on deals.
The embassy in Beijing said it did not become involved after concluding it was a business dispute. Ningbo city police confirmed they had been involved in a case involving Guanghe and a foreigner but declined to give further details by telephone.