A bill introduced jointly by one Republican and one Democratic member of the United States House of Representatives would, if passed, hand authority to the Commodities Futures Trading Commission to oversee the aluminium futures trading activity in the United States, including ceding it power to investigate price setting and benchmarking.
Representatives Ken Buck (CO-04) and Jim Costa (CA-16) introduced the measure, entitled The Aluminum Pricing Examination (APEX) Act, on Thursday. The bill will also give authority to the Department of Justice to coordinate with the CFTC to insure that regulatory and oversight of the industry comports with federal antitrust measures.
In a statement released by Buck’s office, the Colorado Republican said the rationale for implementing such a measure is to protect a free market in aluminium supplies for the benefit of downstream beverage-can producers and users.
“Our beverage and beer industry, along with so many other job-creating industries, rely on a fair and free market for aluminum purchases. To avoid perversions of the free market, like monopoly pricing, we need to fully equip the CFTC, alongside the Justice Department, to investigate pricing irregularities that have been plaguing the aluminum market for months now.”
Buck’s statement continues by pointing out that the Midwest Premium, which is determined by S&P Global Platts, has risen by 137 percent this year to date. According to the representative, the sharp rise is not reflective of the current market in aluminium, and such an increase has wrought a significant harm to downstream users who sell and consumers who buy items including water, soda, beer, and other household aluminium products.
The bill comes after Buck released a letter this summer calling upon United States Attorney General Jeff Sessions to investigate allegations that S&P Global Platts is illegally manipulating the American aluminium market. Cosigning the letter alongside Buck were 31 sitting congressmen from both the Republican and Democratic parties.