The London Metal Exchange (LME) on Monday added Hong Kong as considered one of its global warehouse locations to satisfy growing demand for the physical exchange of metals between mainland China and the remaining of the world, while enhancing Hong Kong’s role as a conduit.
“The addition of Hong Kong to our global warehousing network is an exciting development, providing warehousing facilities closer to the metals hubs of mainland China than ever before,” said Matthew Chamberlain, CEO of LME.
Hong Kong will store LME-registered aluminium alloy, primary aluminium, copper, lead, nickel, tin and zinc, in accordance with an official statement. The town will change into an lively location three months after the approval of the primary warehouse company.
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The move “represents a serious milestone that brings China – the world’s biggest metals consumer – much closer to probably the most lively global metals trading community, strengthening the links between the country’s physical metals markets and international pricing on LME”, said Bonnie Chan Yiting, CEO of bourse operator Hong Kong Exchanges and Clearing (HKEX).
LME has greater than 465 warehouses in 32 locations worldwide, nevertheless it doesn’t own or operate the facilities. Moderately, it authorises warehouse corporations and the warehouses they operate to store LME-registered brands of metal on behalf of warrant holders. LME has been eyeing China as a warehouse location since as early as 2012, when HKEX bought the LME for US$2.2 billion.
“Mainland China is the world’s largest consumer of metals, and with its outstanding business infrastructure, Hong Kong provides the natural hub for connectivity to the Chinese market that’s so essential to market participants and the broader metals industry,” Chamberlain said.
The popularity will support Hong Kong’s development as a regional commodities trading hub, Chan said.
Bonnie Chan Yiting, CEO of Hong Kong Exchanges and Clearing (HKEX), speaks at LME Asia Week at HKEX in Central on June 27, 2024. Photo: Xiaomei Chen alt=Bonnie Chan Yiting, CEO of Hong Kong Exchanges and Clearing (HKEX), speaks at LME Asia Week at HKEX in Central on June 27, 2024. Photo: Xiaomei Chen>
“China’s sustainability commitments and ongoing economic progress will drive continued growth in its demand for metals,” she said. “Having latest LME warehouses strategically situated in Hong Kong, with its robust transportation infrastructure and trusted international frameworks, will help lower logistics costs and enhance efficiencies for delivery networks, benefiting metals consumers and producers alike.”