It was triggered by the acquisition of warehousing companies by JP Morgan and Goldman Sachs; since then, yet more of the industry’s big boys have got into the act, in the shape of Trafigura and Glencore.
And it seems to me that the business has just got better and better.
Now, I made my position on this clear a long time ago. If you produce London Metal Exchange-deliverable material and a warehouse is offering to pay you (either directly or through its “associate”) a healthy premium for that metal, then you would be mad not to take the trade, at least for a good part of the metal.
At a stroke, it clears your concerns about credit-worthiness and it helps keep your cash flowing.
This is, as I said a few weeks ago, the new physical...