Apparently the vampire squid also has an appetite for metal. Goldman Sachs is making an estimated $165 million per year though Detroit warehouses jam-packed with more than a million tons of industrial metal aluminum or about a "quarter of global reported inventories," reports Reuters. The news service's fascinating investigation finds that by simply storing the metals in its warehouses, the investment bank reaps tens of millions of dollars in rental revenues every year. The warehousing business takes advantage of a regulation imposed by the London Metal Exchange that allows warehouses to release "only a tiny fraction of their inventories per day, much less than the metal that is regularly taken in for storage." The problem is, the metal's not going anywhere and it's raising the world price of aluminum, angering a vast array of companies from soft drink can makers to aircraft manufacturers. Robin Bhar, a metal analyst at Credit Agricole, says U.S. and European antitrust regulators need to put an end to the practice. "I think it makes a mockery of the market. It's a shame," he said. "This is an anti-competitive situation. It puts (some) companies at an advantage, and clearly the rest of the market at a disadvantage. It's a real, genuine concern. And I think the regulators have to look at it." A Goldman spokeswoman tells the news service there's nothing illegal about what it does. "Producers have chosen to store metal in Detroit with Metro," she said. Read the whole story at Reuters.
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to email@example.com.