The European Aluminium Foil Association, EAFA, has reported half year results which continue to show a modest, but steady, recovery in demand for both thin and thicker gauges. This is largely led by a strong showing from exports, which are 28% ahead ...
- Alumina faces losses for the closing of (8/22)
- Rusal offers $460/mt premium to Japan al(8/22)
- Spot demand and overseas predictions spi(8/22)
- Hydro opens test pilot for new anode tec(8/22)
- Novelis sees aluminum sales to Audi, For(8/22)
Goldman Sachs Hoarding Aluminum: Why?
- China Aluminium Network
- Post Time: 2011/8/1
- Click Amount: 1395
According to Reuters, Goldman Sachs owns several aluminum storage warehouse. In fact, Goldman is hoarding more than a million tonnes of the stuff. Goldman’s warehoused industrial metal aluminum accounts for roughly a quarter of the estimated global inventories.
Goldman’s warehouse subsidiary is called Metro International Trade Services.
What certainly appears to be the unethical part of this story (aside from Goldman Sachs being part of it, generally) is that like many investors, Goldman trades aluminum commodities. Should a bank that trades aluminum commodities own one quarter of the warehouses?
And hoarding is the correct adjective here because Reuters is reporting that less aluminum is leaving the storehouses than coming in, even though manufacturers who use aluminum need it. (This has to do with London Metal Exchange’s rules that only a certain amount of metal has to be delivered per day based on the city.) If the aluminum sits in the storehouses, then Goldman makes more money off of the rent paid by the aluminum producers to store it.
The Reuters article notes that aluminum costs “$20 to $40 a tonne higher because of the backlog at the Detroit warehouses.”
Either way—whether it’s stored or sold at a higher price—Goldman Sachs makes money. And, of course, higher prices for manufacturers requiring the aluminum are then passed on to the consumer by way of higher product prices.
- Copyright and Exemption Declaration :①All articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China
Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China
Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this.
②Articles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or
accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the
articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey
③If any articles copied by our website concern the copyright and other problems, please contact us within one week.