Price of aluminium cans inflated by bank

International investment bank Goldman Sachs has been accused of inflating the price of aluminium cans through its ownership of storage warehouses.

According to the New York Times Goldman Sachs is using what it calls “loose market regulations” to increase the price of aluminium cans by around US$5 billion a year.

Today (23 July) is also due to see Democratic senator from Ohio, Sherrod Brown, announce plans for hearing to demand the Federal Reserve, which regulates the investment bank, forces them out of the out of the warehouse business.

The New York Times, which published the article at the weekend, claims the price inflation comes from 27 industrial warehouses in the Detroit area where a bank-owned subsidiary stores customers’ aluminium.

Each day trucks move 1,500-pound bars of the metal among the warehouses, two or three times a day loading in one warehouse then unload in another and then they do it again.

The article states, “This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange.

“The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal.

“It also increases prices paid by manufacturers and consumers across the country.”

The Federal Reserve is reported to be is reviewing the exemptions for banks make major investments in commodities.