"When we were there (in Qingdao), we did hear a couple of traders holding the same title," said an iron ore trader at a global trading house who was at the port in the last few days.

"One was saying that one (cargo) belongs to me, the other trader said it belongs to him. They had the same document."

The source, who declined to be identified because he was not authorized to speak to the media, said his stock was financed by Bank of China Ltd and Industrial and Commercial Bank of China Ltd.

"They called us to physically go down with them to start taking stock," he said. "It took us a couple of hours. But one thing is for sure, you can sense that the bankers are worried."

A full-blown scare at Qingdao and beyond would not only affect the supply chain and price of commodities.

Raising money using copper, iron ore or soybeans as collateral for relatively cheap loans is big business in China, a ready source of credit for investors who can then pour the funds into other ventures such as property.

It is also increasingly important in China as banks become stricter in extending credit.

Commodity finance deals in China were worth as much as $160 billion, about 31 percent of the country's total short-term foreign exchange loans, Goldman Sachs said in March.

The immediate fallout from the investigation could make such financing in China, which is already under scrutiny by authorities, even harder and costlier.

"Since the Qingdao case, we, as well as others in the market, have become a lot more cautious and are very selective on who we trade with," said the head of a metals unit at a Chinese State-owned trading firm.

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