THE London Metal Exchange (LME) is exploring setting up its first warehouse in Hong Kong for metals delivery as it seeks to strengthen services across Asia.
“We recently commissioned a third-party feasibility study on this idea, and we have been receiving great support from the local market,” Bonnie Chan, chief executive officer of HK Exchange & Clearing, which owns the LME, said at the LME’s annual Asia seminar in Hong Kong on Thursday (Jun 27).
The move would be a boost for the world’s largest metals trading bourse, which has long aimed at creating a warehouse and logistics system for metals in China to better serve clients from the top market. LME warehouses have been absent in the mainland due to challenges including concerns around competition with the Shanghai Futures Exchange. In Hong Kong, high property and labour costs have been a hurdle.
The Hong Kong Energy, Mining and Commodities Association, a local industry body that includes metals traders, said it has been in talks with the bourses to promote the city as a “good delivery point” to serve clients from the city and mainland China to throughout the Asia-Pacific region.
The association is collecting logistics and industry data for LME, it said. The exchange has already operates warehouses across Asia, including Singapore, South Korea, Malaysia, Japan and Taiwan. BLOOMBERG
