the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Nov 9, 2009
A British hedge fund, Ebullio Capital Management, bought up 90% of the tin held in the warehouses of the London Metal Exchange (LME), the leading world exchange for non-ferrous metals. It means this fund controls almost all the tin in the world.
Tin may not be as important as aluminum or copper, but it is used to make electronic circuits. Speculators in tin stand to make a lot of money – the very reason that Ebullio has taken over almost the entire stock of tin. There are problems in mining tin in China and Indonesia. Supplies are expected to go down. At the same time, demand for tin in the Asian countries is going up.
It’s good news for Ebullio – which will profit from its dominant position by imposing much higher prices than the law of supply and demand would suggest. Tin today sells for $15,000 a ton compared to $9,700 last December.
So some competitors complained to the so-called “regulatory” body of the London Metal Exchange. It refused to intervene, saying that Ebullio’s dominant position fully “respected” the laws of the market.
Under capitalism, it’s completely legal to speculate in raw materials essential for production. Yes, speculation is even completely legal on those products essential for the survival of human beings – like rice, wheat and corn.