NEW YORK Galvanizers Co. has filed a class-action lawsuit against the London Metal Exchange, Glencore Xstrata Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and their respective warehousing units over alleged warehouse manipulation that it claims has driven up U.S. zinc premiums.
The trading houses "conspired to manipulate global warehouse supplies of zinc through numerous anti-competitive means, in concert with the LME," and have "injured purchasers of zinc for physical delivery globally and in the United States" from "at least May 24, 2010, to the present," Galvanizers said in documents filed in U.S. District Court in New York.
"Goldman, JPMorgan and Glencore, as members of the LME Warehousing Committee and owners of the LME, maintained an agreement that required a minimum of 1,500 tons (later increased to 3,000) of metal per city to be released each day. ... However, implicit in the shipping requirements was an agreement that the minimum could readily be treated as a maximum with no penalty," the lawsuit said.
The Portland, Ore.-based galvanizers suit follows similar action by zinc consumers Duncan Galvanizing Corp., Oklahoma Steel & Wire Co., Iowa Steel & Wire Co. and Southwestern Wire Inc. (amm.com, June 19)