Brewer Miller Coors last week told the US Senate that inflated aluminium prices were costing consumers $3bn (£2bn) a year, putting the focus on the stockpiles held by the Wall Street investment bank and the world’s largest commodity trading firm.
Together, the two firms are estimated to control two-thirds of the world’s stockpiles of aluminium, with Goldman Sachs holding 1.5m tons, while Glencore has 2m tons in its warehouses.
Aluminium prices have more than doubled in the past three years. At the same time, the amount stored in warehouses has hit a record 5.5m tons.
No, I don\’t know the details of this market. But something doesn\’t sound quite right about it.
Global annual production of aluminium metal is 45 million tonnes or so.
Yes, I know that prices work at the margin and all that. But I\’m deeply unconvinced that a stock of 10% of annual production is going to manipulate prices very much. I can imagine that it does indeed make a significant difference to who gets the profits from playing around with futures and spot prices. The speculators or the banks that own the warehouses. But I can\’t see how there\’ll be a significant link to general Al prices.