LME, Goldman Sachs accused of monopolistic behaviour
The world's biggest metals market, the London Metal Exchange, and American banking giant Goldman Sachs are being sued over alleged anti-competitive and monopolistic behaviour concerning aluminium storage, the Hong Kong stock exchange said.
The suit was filed in a US district court in the state of Michigan on August 1 by aluminium company Superior Extrusion.
According to a Sunday statement released by the Hong Kong Exchanges and Clearing, which bought LME last year, the Michigan-based plaintiff accuses LME and Goldman Sachs of "anti-competitive and monopolistic behaviour in the warehousing market in connection with aluminium prices".
The exchange said that after an initial assessment made by LME's management "the suit is without merit and LME will contest it vigorously".
Goldman Sachs also said in a statement it would vigorously contest the accusations which it called without foundation, noting that "aluminium prices are down 40 percent from their peak in 2006."
Complaints have mounted recently over delays in accessing aluminium stocks stored in warehouses, resulting in added costs that have led to an increase in prices.
In the lawsuit Superior Extrusion charged that LME and Goldman Sachs "have generated hundreds of millions of dollars per year in storage revenues during their regime of artificially high storage rates and grossly inefficient and artificially long delays in loading out aluminium."
Last month, an official of brewing company MillerCoors told a Senate panel that aluminium consumers last year paid an additional $3 billion in expenses because of delays in delivering aluminium from storage facilities controlled by large financial players including Goldman Sachs.
The LME, through which 80 percent of trading of industrial metals is conducted, approves and licenses storage facilities for the traded commodities, while Goldman Sachs has a warehousing unit.
In the beginning of July, the LME launched a three-month consultation process to try to reduce the delays.
© 2013 AFP