RE:RE:RE:RE:Slow boat to chinaNice discussion here - when & what does CIA get paid under the Sojitz & Glencore offtake agreements? Quarterly is due end of this week (ASX) so might shed some light on this. Also the Annual report is due in May.
I did a little research on Glencore trading & the below two articles shed some light on their business model.
I think it's more sophisticated than payment by boat whether FOB basis or delivery on the current spot market.
It appears Glencore pre-pays iron ore suppliers and sells the cargo forward using the futures market with a slight premium based on guaranteed volume.
Still don;t know what CIA actually gets under the off-take agreement but payment may be prior to loading onto ships. Glencore takes on price risk & hedges the risk.
I assume Sojitz business model along same lines?
Here are the articles:
https://www.platts.com/latest-news/metals/london/glencore-back-to-profit-in-iron-ore-trade-for-26895783
https://static1.squarespace.com/static/52483801e4b0cd3b08465542/t/5550049be4b089d79b01e4c4/1431307419736/Issue+123.pdf
.