it is metal production enterprise's own products sold at a discount to banks

According to our news source, the result will depend on the nature of those transactions. However, in many cases, it is metal production enterprise's own products sold at a discount to banks, so that demand sluggish economic environment to increase their cash flow. These metals have been stored in the warehouse by banks, the next 2-4 years through the buyback may sometimes be re-sold to the same manufacturers.
Through the "blockage" Warehouse, more and more real metal end consumers have been forced to bypass the LME inventory system, directly to the producers of the - where they would have to pay on the basis of LME quoted at a premium. For a long period of time, this mechanism so that everyone is satisfied (in addition to the end consumer). But only in the presence of repurchase obligation earnings premium (contango) in the context of constantly renewed, this strategy can continue. But now, as far as we know, some Molybdenum tube have chosen to sell their products on the market through to escape repurchase obligations. This has led the market to withstand a large number of products that are not hedged supply, which in turn impact on the spot price correspondingly.
If for marginal costs outweigh the benefits, causing the banks can not continue to move forward extension of these hedge positions, while "clogged" inventory no longer provide additional rental income, the profitability of the whole mechanism now will change. If this happens, when the existing inventory disappear easily anticipated, or base metal prices fall further, or base metals futures contracts contango situation further exacerbated, and may even return to the super contango situation.