The world market for basic materials is still experiencing demand contraction as a consequence of the international recession and the low growth in China. The aluminum industry is not exempted from this, and lower aluminum prices have hurt companies’ overall sales. In this context, the players in the aluminum field are being forced to trim costs in order to handle the pressure.
But CNBC says GS is manipulating the aluminum prices higher and higher. So who is right?
CNBC is relying upon Sunday's NYT article which says that shuffling aluminum between warehouses in Mount Clemens, MI is very profitable to GS and the LME. Al consuming industries are upset because the shuffling charade is raising prices for everybody.
I doubt GS can manipulate aluminum prices. However, should it be legal for GS to be warehousing aluminum? It's a bank and financial services company and not involved in warehousing metals IMHO. Also, GS in heavily involved in shipping. Both of these activities conflict with their role as bankers.