STG, a trading company funded by principals of the U.S. hedge fund Squarepoint, has bought a large amount of aluminum from Radiant World as the commodity trading house sells off inventory to raise cash, two industry sources said.
Asked about the transaction, Radiant said it did not comment on commercial matters. Squarepoint declined to comment.
Radiant, which is best known as an iron ore trader but also deals in base metals, has come under intense scrutiny in recent weeks because of concerns over the validity of invoices provided to its banks.
Deutsche Bank and KBC Group have frozen some of Radiant’s Singapore bank accounts, while some other lenders have suspended credit lines, Bloomberg News reported last week. Radiant has declined to comment on any discussions with specific lenders but says it conducts its business to the highest commercial and legal standards.
The exact volume of aluminium sold by Radiant to STG and the price at which the transaction was agreed were not known.
The sources said, however, that STG was buying a substantial amount of the aluminium offered by Radiant.
One of the sources said Radiant’s stocks were distributed across multiple locations globally, including China and Europe.
A third source familiar with the matter estimated Radiant had about 40,000-50,000 metric tons of aluminium in various locations. The material is being held in private storage rather than in exchange warehouses, the source said.
Such a stockpile would be worth between $130 million and $165 million at current aluminium prices CMAL3, although sources expect Radiant would have had to sell the metal at a discount.
A fourth source familiar with the matter said that in addition to aluminium, Radiant was looking to offload 1,500 tons of copper inventories.
Potential buyers are bidding aggressively for the material, the fourth source added.
All the sources declined to be named because of the sensitivity of the matter.
(Reporting by Amy Lv, Tom Daly and Pratima Desai; Editing by Nia Williams)
