Inc. and other aluminum consumers wont benefit from
Goldman Sachs Group Inc.s offer to swap metal in
warehouse queues with available material, as they have no metal
in the queues, Novelis senior vice president and chief
supply chain officer Nick Madden told AMM sister
publication Metal Bulletin.
Goldman Sachs on Aug.
2 offered to swap any aluminum held by consumers in the
delivery queue at Metro International Trade Services LLC
warehouses for immediately available aluminum that it had
sourced directly from producers.
Goldman president and
chief operating officer Gary Cohn told CNBC that no
one had accepted the offer, suggesting that there are no
consumers waiting for metal in the delivery queue.
Madden confirmed that
Atlanta-based Novelis was among the consumers that had
received the Goldman offer, but said it was unlikely that any
companies would take it up.
"We believe that other
physical users of aluminum, like Novelis, are unlikely to be in
the queue because no manufacturing business can tolerate a
19-month delay between buying metal and achieving delivery,"
"Novelis ruled out
Detroit as a source of physical metal back in 2011, after
sourcing aluminum from Detroit and waiting five months to
receive the metal at our plant in Oswego, New York," he
"Since then, the wait
time has ballooned. This raises the question of who are the
clients who own the metal in the queue in Detroit.
It is our belief that this material belongs primarily to banks
and trading companies which may be moving the metal to other
While Madden backs
Goldman Sachs position that consumers are not struggling
to access metal, he maintains that the current warehousing
system is damaging to the market.
A version of this
article was first published in AMM sister publication Metal