Chinese traders, steelmakers quietly drop Radiant World over settlement delays

Some Chinese iron ore traders and steelmakers have stopped doing business with Radiant World this year, even before recent negative reports about the trading house, according to four sources familiar with the matter.

Two sources said they halted dealings because they were uncomfortable with how long final settlements were taking. Two others said state-owned iron ore buyer China Mineral Resources Group (CMRG) had urged them to reduce exposure to the firm.

One iron ore trader at a state-backed firm said, "We stopped doing business with Radiant World from June... in part because the final settlement with the company has been taking unusually long, making us feel uncomfortable." The trader declined to be named as he was not authorised to speak to the media.

A manager at a Chinese steel mill that previously bought seaborne cargoes from Radiant World said it had stopped in recent months and held internal discussions to evaluate future cooperation, without elaborating.

Scrutiny around Radiant World intensified after Bloomberg News reported last week that Cargill and Vitol Group had cut ties over concerns that invoices or other documents provided to banks were not valid. Radiant World called those claims "inaccurate and unsubstantiated." A spokesperson said the firm "does not comment publicly on individual counterparties, trading activity, or commercial positions."

On Wednesday, Glencore CEO Gary Nagle said the company had taken a provision related to Radiant World and stopped new business with it, adding that exposure was not material. Bloomberg also reported that Deutsche Bank and KBC Group froze some of Radiant World's Singapore bank accounts, while other banks suspended credit lines.

CMRG did not respond to a request for comment.