Goldman Sachs has been roundly criticized for its warehouse practices--recall that it owns Metro International, a 19-building structure in Detroit--and the effect they are having on metals commodities, especially aluminum. The London Metals Exchange, which is built on the idea of physical delivery of the commodities, has been beset with complaints about various delivery delays recently from the likes of Coca Cola.

Since Goldman Sachs purchased Metro, the wait time for physical delivery of aluminum has steadily increased to about seven months--much to the chagrin of companies that want the metal for real industrial use. We liken the warehouse to a roach motel, where it's easy to check in but much harder to check out. Reuters now reports that warehouse wars have broken out, as the likes of JPMorgan and Glencore, other big warehouse operators, have gotten involved and as signs emerge that the controversy is spreading to the lead and zinc markets. Some are actively shifting metal out of Metro in an effort to reduce the warehouse's impact on the market.

Goldman Sachs has said that the long lines faced by companies seeking physical delivery "were a result of complex market dynamics and that it was in complete compliance with LME rules." It stresses that it is in compliance with LME rules. Others note that Goldman Sachs charges rent and benefits from the long delays. One trader told the news service that, "There are various ways to play games and create queues in this business. One of them to is get all the material in a certain location. Another is to get your competition's material...and make sure that material is at the head of the queue (to leave warehouses), thereby protecting your own (stockpile)."

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