A lawsuit brought by Superior Extrusion has named both Goldman Sachs and the LME as co-defendants and accused them of ‘anti-competitive and monopolistic behaviour’.
The case focuses on Metro International, purchased by Goldman Sachs in 2010. Metro stores aluminium in Detroit warehouses. The LME authorises warehouses – in Detroit and elsewhere in the world – to hold aluminium and takes a cut of the rent paid by the aluminium producers.
While both Goldman Sachs and the LME claim the lawsuit is ‘without merit’ , US regulators have launched a probe into warehousing following an investigation by journalist David Kocieniewski, which found that waiting times for aluminium deliveries have risen to 16 months – a tenfold increase since 2010.
The lawsuit against Goldman Sachs and the LME follows MillerCoors executive Tim Weiner’s US senate testimony in late July, which alleged that warehouse practices had inflated global light metal prices by $3bn in the space of a year.
A news report from Bloomberg claims that JP Morgan Chase has also been sued – alongside Goldman Sachs and Glencore Xstrata – over claims that it ‘restrained aluminium supplies and drove up prices’.
JP Morgan says there are no queues at it’s warehouses and, like Goldman Sachs and the LME in the earlier case, claims that the lawsuit has no merit.
The JP Morgan lawsuit was brought by Jacksonville, Florida-based Master Screens Inc and by Daniel Bart of Tallahassee, a ‘purchaser of beverages sold in aluminium cans’.
JP Morgan owns Liverpool-based Henry Bath & Son, a similar operation to Goldman Sachs’ Metro International. It is said that UK-based warehouses are in a better position to those in the USA. Henry Bath is currently up for sale and claims to have no customer queues.
Goldman Sachs is said to make a staggering $255 million by storing just 3% of global aluminium production.