Banks seen likely to stay in commodities

Financial institutions could remain active in commodities markets following the dismissal of antitrust litigation that accused major banks and the London Metal Exchange of conspiring to artificially inflate aluminium prices, according to several US-based aluminium traders.

A US court recently dismissed the remaining claims against Hong Kong Exchanges & Clearing (HKEx) and its subsidiaries, the LME and LME Holdings Ltd (LMEH), in the class-action lawsuits. Other defendants included Glencore, Goldman Sachs Group, JPMorgan Chase & Co. and their respective warehouse subsidiaries. "The bigger picture here is not so much the warehousing suit, it’s whether banks will exit the physical commodity space all together," one US based aluminium trader told Metal Bulletin sister title AMM. "In my opinion, this ruling will probably inspire them to play a bit longer in metals and other commodity-related sectors." Gwinn, Michigan-based Superior Extrusion filed a class-action lawsuit last year against the LME, Goldman Sachs and others, sparking a wave of similar complaints. The complaints alleged that purchase prices...


This article was first published by AMM

September 03, 2014

03:25 GMT

New York