Goldman Sachs has 1/4 the world's aluminum in two Detroit warehouses

teacherone

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2011-07-28t142838z_01_btre76r148800_rtroptp_3_business-us-lme-warehousing.grid-6x2.jpg


LONDON/DETROIT — In a rundown patch of Detroit, enclosed by a cyclone fence and barbed wire, stands an unremarkable warehouse that investment bank Goldman Sachs has transformed into a money-making machine.

The derelict neighbourhood off Michigan Avenue is a sharp contrast to Goldman's bustling skyscraper headquarters near Wall Street, but the two operations share one important element: management by the bank's savvy financial professionals.

A string of warehouses in Detroit, most of them operated by Goldman, has stockpiled more than a million tonnes of the industrial metal aluminum, about a quarter of global reported inventories.

Simply storing all that metal generates tens of millions of dollars in rental revenues for Goldman every year.

There's just one problem: much less aluminum is leaving the depots than arriving, creating a supply pinch for manufacturers of everything from soft drink cans to aircraft.
 
Is there some sort of fund which hold physical aluminium? Seems too expensive.
 
This is direct proof that qe spikes commodity prices.

Obviously, all of us new that, but it provides a direct refutation to the doubters.

I'll look it up later, I don't remeber the particular speech at the moment, but a month or two ago the Bernak was "debunking" the notion that qe caused higher commodity prices.

"If that was the case, you would see speculators stockpiling large amounts of commodities for re-sale," he said.
 
Yep pretty much.

Goldman Fuckheads know that monetary inflation has already been expanded so much that once it's unleashed, those holding hard assets will be on top.

Blueskies said:
This is direct proof that qe spikes commodity prices.

Obviously, all of us new that, but it provides a direct refutation to the doubters.

I'll look it up later, I don't remeber the particular speech at the moment, but a month or two ago the Bernak was "debunking" the notion that qe caused higher commodity prices.

"If that was the case, you would see speculators stockpiling large amounts of commodities for re-sale," he said.
Click to expand...
 
Annual global production of aluminum is reported to be 38 million tonnes (metric tons). http://www.globalalumina.com/ind_overview.php Every year. If this warehouse has one million tonnes, it is not even one quarter of what is produced each year. There is absolutely no way it holds one quarter of the world's supply.
Historically, world alumina supply and demand had been balanced, with annual production capacity of aluminium and alumina now totalling approximately 38 million metric tons and 75 million metric tons (metallurgical grade), respectively
Click to expand...
 
Coke to Goldman: Don't Mess With Aluminum Prices


Coke is accusing Goldman of limiting the supply that is leaving its warehouses, trying instead to increase stockpiles and artificially boosting the prices that producers can charge. In short, Coca-Cola is accusing Goldman of hoarding and manipulating aluminum prices higher.

Coke has got a case. Despite a marginal increase in demand and enormous surpluses, Metro has continued to deliver the bare minimum of aluminum to the marketplace -- 1,500 metric tons a day -- the least that the LME requires from its registered warehouses. At that rate, "It takes two weeks to put the aluminum in, and six months to get it out," according to Dave Smith, Coca-Cola's procurement manager.
Click to expand...
http://www.thestreet.com/story/11160546/1/coke-to-goldman-dont-mess-with-aluminum-prices.html
 
Zippyjuan said:
Annual global production of aluminum is reported to be 38 million tonnes (metric tons). http://www.globalalumina.com/ind_overview.php Every year. If this warehouse has one million tonnes, it is not even one quarter of what is produced each year. There is absolutely no way it holds one quarter of the world's supply.
Click to expand...

I was thinking the same thing as soon as I read the title.
Two warehouses are holding 1/4 of the aluminum supply for the whole world?
I've seen photographs of airplane junkyards out west - seems like there's a lot more aluminum sitting (unused) there.

Am I off on this?
 
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123tim said:
I was thinking the same thing as soon as I read the title.
Two warehouses are holding 1/4 of the aluminum supply for the whole world?
I've seen photographs of airplane junkyards out west - seems like there's a lot more aluminum sitting (unused) there.

Am I off on this?
Click to expand...

An average plane is in the order of 60 tonnes. Average production is a thousand a year (boeing and airbus) which makes 60000 tonnes. You're off.
 
All paid for with your tax and bond dollars during the grand bailout. Aren't you proud to know you helped them gouge you on everything you buy with aluminum in it? Doesn't it just warm the cockles of your heart?
 
Zippyjuan said:
Annual global production of aluminum is reported to be 38 million tonnes (metric tons). http://www.globalalumina.com/ind_overview.php Every year. If this warehouse has one million tonnes, it is not even one quarter of what is produced each year. There is absolutely no way it holds one quarter of the world's supply.
Click to expand...

Depends. As your link said, annual production usually equals annual consumption. Is Goldman hording metal that is ready for use in industry? It's a supply chain that is in balance. If some supply is diverted at any step in the process, it will have an effect. Could Goldman have one quarter of the inventory of usable and ready aluminum? The amount that is available to a commodity exchange is far less than the actual physical amount. For instance, Grandma's gold necklace is not part of the available gold for sale at the COMEX.
 
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