Chinese banks beef up lending to Singapore metal traders as the sector bottoms out

Some offers an annual flexible credit line at 1-1.5% over LIBOR.

Chinese banks are stepping up lending to midsize metals traders in Singapore, pushing into a gap in the market as U.S. regulations and fading appetite for risk drive Western rivals to focus on larger commodity merchants, metals industry sources said.

The move adds to a broader push by Chinese banks overseas and comes as markets for metals such as zinc and aluminum show signs of revival after half-a-decade in the doldrums.

It is also likely to help efforts by the world's No. 2 economy to boost its influence in the region's supply chain, with Singapore a major hub for trade in base metals, used in everything from batteries to construction.

Three executives at medium-sized metals trading companies in Singapore told Reuters they had in the past few months been approached by Bank of China International (BOCI), a unit of Bank of China, with two of those securing new credit lines.

Those two borrowers said they had also been approached by the Singapore corporate unit of Industrial and Commercial Bank of China (ICBC). None of the executives wanted to be identified due to the sensitivity of the issue.

Here's more from Reuters.