Aluminum MMI®: US Senate Slams Aluminum Warehousing, Oil Investing

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Source: Novelis

This week, the US Senate released a report gathering findings of a 2-year investigation into Wall Street banks’ activities in commodities markets.

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It found that Goldman Sachs Group, JPMorgan Chase & Co. and MorganStanley exposed themselves to catastrophic financial risks, environmental disasters and potential market manipulation by investing in oil, metals and power plant businesses, according to the Senate report.

The banks’ involvement in physical commodities put them in the same vulnerable position as BP, the report said, which has been hit with multiple lawsuits and billions in fines as a result of the 2010 Gulf of Mexico oil spill.

The report had particularly harsh things to say about Metro International Trade Services, a network of metals warehouses in Detroit owned by Goldman Sachs, which the banking institution is now selling. Goldman’s ownership led to “merry-go-round” deals, which caused long queues to take delivery of aluminum and raised prices for consumers and companies, the report said.

Chinese aluminum scrap saw the largest upwards shift on the weekly Aluminum MMI®, rising 5.7% to settle at CNY 12,950 ($2,116) per metric ton. In the past week, the price of Chinese aluminum billet shot up 3.0% to CNY 14,000 ($2,288) per metric ton. The Chinese aluminum cash price closed last week at CNY 13,660 ($2,232) per metric ton, after a 0.1% drop. Chinese aluminum bar prices held steady from the previous week at CNY 14,200 ($2,321) per metric ton.

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The 3-month price of aluminum fell 2.0% on the LME to $2,014 per metric ton after rising 1.1% the week before. Following a 1.3% increase in the week prior, the primary aluminum cash price fell 1.9% on the LME last week to $2,025 per metric ton. The cash price of primary Indian aluminum fell 0.4% for the week to settle at INR 125.75 ($2.03) per kilogram.

Korean 3003 coil premium over 1050 sheet remained essentially flat from the previous week at KRW 3,740 ($3.36) per kilogram. At KRW 3,890 ($3.49) per kilogram, the week finished with no movement for Korean 5052 coil premium over 1050 sheet. European 5083 plate traded sideways last week, hovering around EUR 2,854 ($3,609) per metric ton. European 1050 aluminum remained essentially flat from the previous week at EUR 2,496 ($3,156) per metric ton.

The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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