Goldman Sachs offers aluminum to clients waiting for supply

Considered Selling

Goldman earlier this year had considered selling Metro, according to a person briefed on the discussions. The bank must sell the company within 10 years of its purchase, it said today.

JPMorgan Chase & Co. said last week that it plans to get out of the business of owning and trading physical commodities ranging from metals to oil, days after a Senate panel questioned whether banks are abusing their ownership of raw materials to manipulate markets.

Cohn said that while his firm will sell Metro at the “appropriate time,” it doesn’t have plans to get out of other commodity businesses.

“Commodity hedging is a core competency and one of the most important things we do in the firm, and our clients really need us to be in that business,” Cohn said. “We are staying in the commodity-hedging business.”

Banks Retreat

Glencore Xstrata Plc, the biggest publicly traded raw- materials supplier, became the largest owner of warehouses monitored by the LME as banks pull back amid increased scrutiny by lawmakers and regulators.

Low interest rates have encouraged some investors to buy and store aluminum with the intent of selling it at a later date, Goldman Sachs said. Warehousing companies, which don’t own the metal they hold, offered incentives to attract supply, according to research from Societe Generale SA.

Many market participants have sought to move metal to non- LME warehouses, where storage rates are lower, prompting the longer queues, Goldman Sachs said.

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