Goldman on Wednesday tried to defuse complaints about waiting times and high prices at its metals warehouses across the world by offering immediate access to aluminum for end users holding metal at its Metro International Trade Services unit.
Banks that own commodity assets and trade raw materials have drawn increasing criticism in recent weeks, with federal regulators in the United States taking a look at the metals warehousing industry. Britain’s financial watchdog is also investigating the London Metal Exchange’s warehousing system.
The lawsuit outlines “anticompetitive and monopolistic behavior in the warehousing market in connection with aluminum prices,” Hong Kong Exchanges said in a statement on Sunday.
The lead plaintiff in the lawsuit, filed on Thursday in Federal District Court in Michigan, is Superior Extrusion, an end user of aluminum.
“L.M.E. management’s initial assessment is that the suit is without merit and L.M.E. will contest it vigorously,” Hong Kong Exchanges said in a statement.
Customers and American lawmakers have accused Goldman and other warehouse owners of artificially inflating waiting times to increase rents for warehouse owners and lift metal prices.
“We believe this suit is without merit and we intend to vigorously contest it,” a Goldman Sachs spokesman said. “I would also note that aluminum prices are down 40 percent from their peak in 2006,” he said.
London Metal Exchange aluminum for three-month delivery settled on Friday at $1,809 a ton.
Warehouse owners and the departing chief executive of the London market, Martin Abbott, have contended that complaints over long lines are unjustified, arguing there is no shortage of metal.
Article source: http://www.nytimes.com/2013/08/05/business/global/goldman-named-in-suit-over-aluminum-supply.html?partner=rss&emc=rss