WASHINGTON Nov 15 (Reuters) - The U.S. Justice Department is still "looking at" allegations that metals warehousing companies have inflated prices, a top official said on Friday, amid continued intense regulatory, political and legal scrutiny of the metals market.
At the heart of the issue are storage companies owned by big commodities merchants and Wall Street banks, which aluminum users including Coca-Cola Co and Miller Coors LLC allege have inflated prices and distorted supplies of key metals. They use aluminum to make beverage cans.
The companies including Pacorini, owned by Glencore Xstrata , Trafigura's NEMS, Goldman Sachs unit Metro and JPMorgan Chase & Co's Henry Bath have found a lucrative business in building up big stocks of metals, charging rent for storage and delivering the metal out of storage at a limited rate.
On Friday, Bill Baer, the Justice Department's assistant attorney general for antitrust, was asked at a congressional hearing if his agency was pursuing the issue.
"I can't comment on any details. This is a matter we are looking at," he told the U.S. House Judiciary Committee's regulation and antitrust subcommittee.
It is not clear if the DOJ has advanced beyond the preliminary probe reported by Reuters in July.
In August, the officials from the department visited an unnamed warehousing firm in the United States and asked about how the business was run.
Officials for Goldman, JPMorgan, Trafigura and Glencore declined to comment on the matter on Friday.
Goldman has said previously its warehousing subsidiary was not driving up prices or violating any laws and JPMorgan has repeatedly said its Henry Bath unit has no queues.
The legal, regulatory and political scrutiny of the London Metal Exchange, which works with and monitors a vast network of warehouses, the storage firms and their owners, remains intense.
U.S., British and European regulators are investigating the issue and the LME, the world's oldest and biggest metals marketplace, has announced sweeping reforms to its storage policy after years of complaints from industrial users.
The powerful Senate Banking Committee will likely revisit the issue when it questions financial regulators over Wall Street's role in commodity markets next week.
At the first hearing on the topic in July, MillerCoors, the second largest brewer in the United States, said high physical prices have cost U.S. consumers an extra $3 billion a year.
At least 20 small aluminum fabricators have filed class-action lawsuits accusing the banks and large commodity traders of hoarding metal in warehouses and driving up the prices of industrial products ranging from soft-drink cans to aircraft.