LME faces new US legal challenge over zinc warehousing

The legal challenges against the London Metal Exchange’s warehousing regime have spread to the zinc market, with a new US class action suit filed on May 23.

The Hong Kong Exchanges & Clearing (HKEx) said it and its subsidiary the London Metal Exchange had been named as co-defendants in the case. The exchanges already face a number of lawsuits launched last year related to alleged distortion of the aluminium market

Some of the same lawyers representing purchasers of aluminium have “filed a new class action complaint alleging similar anti-competitive and monopolistic behaviour in the warehousing market in connection with zinc prices”, HKEx said in a statement.

The lead plaintiff in the case is Duncan Galvanising, which, according to its website, is a privately-owned galvanizing business based in New England, Massachussetts.

HKEx said that despite the similarity between the two cases, the zinc suit was likely to “proceed on separate tracks”.

HKEx and LMEmanagement’s initial assessment is that the lawsuit is without merit and HKEx and the subsidiaries will contest it vigorously.

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