Banks inflating aluminium price, say drinks can makers Beverage Can Makers Europe, an influential trade body whose members include the FTSE 100-listed Rexam, claims that banks that own warehouses used by the London Metal Exchange are deliberately slow to deliver stocks to "create an artificial market shortage that impedes the real forces of supply and demand." It has written to the European Commission and other regulators, calling for a major shake-up of the system, which it claims is "structurally inefficient" and has driven up the cost of drinks cans across Europe. Although many can manufacturers buy most of their materials outside the London Metal Exchange, the trading platform is crucial as a "last resort" for physical deliveries of materials such as aluminium, as well as a mechanism for establishing prices. However, that also makes it appealing to banks to allegedly manipulate the LME, using the fact that they own many of the 700 warehouses which the exchange draws on for its supplies. In some cases, aluminium users have waited up to 18 months to get their hands on goods, even though they are paying rent for storage at the same time. The long queue has pushed prices upwards, and prompted accusations that banks are manipulating the system unfairly. The allegation comes as US regulators prepare an investigation into the impact that banks including Goldman Sachs and JP Morgan are having on the price of metals. America's Commodity Futures Trading Commission has started the ground work for an investigation, and yesterday bankers were quizzed about the practice by senators.