Goldman Sachs Banks on LME Aluminum Warehouses: So What's New?

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Admittedly the coolest, trickiest trick Goldman Sachs plays in the LME warehousing scheme is to have truckers shuttle the metal between warehouses several times a day, thus adhering to maximum-storage-time rules while continuing to make bank on rent, as reported in a recent NY Times “exposé.”

However, although the article was thoroughly reported, the above tidbit seemed like the only highlight of a mostly yawn-inducing story, only because MetalMiner and others in the industrial metals space have been covering this scheme for quite some time – and because these tactics are not new to us. Read Stuart Burns’ most recent analysis on how metal price distortions are spreading.

Basically, the likes of Goldman, Glencore and others are getting into the physical commodities game because – surprise! – they’re pretty much legally allowed to do so. After banking regulations have been relaxed since the 80s, these big guys have not stopped thinking up ingenious ways to make some cheddar.

The trouble comes in, as the Times explicates, when distributors and manufacturers are essentially blocked from going about their business by Wall Street behemoths, and are forced to pay high premiums as a result of all this…the making of a classic Main Street v. Wall Street brouhaha.

* So you’re a manufacturer who buys aluminum – what can you do? Read Lisa Reisman’s take.

What Are Aluminum Prices Today?

The aluminum cash price saw the biggest upwards shift for the day, rising 1.1 percent on the LME to close at $1,772 per metric ton on Monday, July 22. On the LME, the 3-month price of aluminum increased 1.1 percent to $1,816 per metric ton.

The Indian aluminum cash price inched up 0.6 percent.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum closed mixed yesterday. The Chinese aluminum cash price rose 0.2 percent. The price of Chinese aluminum scrap saw little movement. The price of Chinese aluminum billet continues hovering in place for the fifth day in a row. The price of Chinese aluminum bar held steady.

FREE Download: The latest Monthly MMI® Report – covering the Aluminum market.