The smaller increases are part of an effort by warehouse owners to launch a charm offensive against charges that they have manipulated the flow of commodities out of their warehouses in a move to prop up prices. Goldman Sachs Group Inc. (NYSE: GS), which owns Detroit-based storage operator Metro International, has said it will raise its storage rate for aluminum from $0.48 per metric ton (tonne) per day to as much as $0.51 per tonne per day. Metro’s transport charge remains unchanged at $38.95 a tonne.
The warehouses have been getting heat for more than two years for long delays in shipping aluminum to buyers. The Coca-Cola Co. (NYSE: KO) filed a complaint with the LME in 2011 alleging that Metro brought aluminum into its warehouses and then refused to let the stuff leave, which caused delays in delivery, higher storage charges and higher prices for aluminum. Coke claimed that Goldman/Metro paid cash incentives to producers like Alcoa Inc. (NYSE: AA) and Rio Tinto PLC (NYSE: RIO) to store aluminum in Metro’s warehouses during the 2008 and 2009 recession.
The issue burbled around until this past July, when Coke and MillerCoors again complained. Goldman agreed to swap metal it held in its Metro warehouses for spot shipments. The bank wants to head off stricter rules on its trading activities and a possible end to its ability to hold and trade the physical commodities. The small rate increases coming in April are just another part of the warehouse owners’ strategy to play nice long enough to get through a regulatory review with minimum damage to their business. The strategy is very likely to be successful.
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.