"As for us, we are now only willing to work with big trading companies, those with which we've had a long-term working relationship or companies that have solid finances. This will be the strategy for many of us until we get more clarity."

Standard Chartered Plc said it was reviewing metals financing to a small number of companies in China. Three sources said the lender had suspended new metal financing to some customers in the country.

An executive in charge of commodity financing at an Australian bank said lenders would pause to take stock of how serious the problem in China was.

"If it's concentrated around one particular firm, we can probably quarantine it in that way and get ourselves back to a level of comfort relatively quickly," he said. "If there's not already, it probably points to the fact that there needs to be a central registry of warehouse receipts."

Greater oversight of Chinese warehousing is needed to reduce the risk of future lapses, say China legal experts.

In one ongoing case, an operator allegedly allowed someone to enter his warehouse and replace peanut oil with water, steadily eroding the value of the collateral, according to a partner at a top law firm who is located in Hong Kong. The switch came to light when the financing bank went to claim the collateral.

Copper prices on the LME hit one-month lows on Friday amid concerns that owners of physical metal in China who have been spooked by events in Qingdao will look to sell, while others may shift their stocks to LME warehouses elsewhere.

"The countries where the LME is, the confidence level is much higher ... and of course there is a (regulatory) structure in place," said one source at a warehousing company.

The LME, owned by Hong Kong Exchanges and Clearing Ltd, has warehouses in many countries, but it is not authorized to license warehouses in China.

Robust growth at Shanghai port	Tianjin Port plans to upgrade its overall environment