Daily Archives: May 24, 2014

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In new warehousing suit, Goldman, JPMorgan sued over inflated zinc prices

In new warehousing suit, Goldman, JPMorgan sued over inflated zinc prices

Wall Street banks, big metal merchants and the London Metal Exchange face a lawsuit alleging they have artificially inflated zinc prices, expanding a high-profile legal case that has until now centered on the larger aluminum market.

In a filing on Friday, Duncan Galvanizing, one of the oldest galvanizers in the United States, accused Goldman Sachs Group Inc (>> Goldman Sachs Group Inc), JPMorgan Chase & Co (>> JPMorgan Chase & Co.), the LME and metal warehouse operators of conspiring since 2010 to manipulate the U.S. zinc price.

The suit, registered in the Southern District of New York, is the first to include allegations over the impact of warehousing on the smaller, niche zinc market. Zinc is used to coat steel to protect against corrosion.

The lawsuit names as defendants the mining and commodities trading group Glencore Xstrata (>> Glencore Xstrata PLC) and its Pacorini Metals USA LLC unit. Metro International Trade Services, the metal warehousing of Goldman Sachs, is also named a defendant.

The lawsuit, which seeks class action status, echoes the allegations made in 26 suits that have been consolidated into a class-action suits over alleged price fixing of the aluminum market in the United States.