The London Metal Exchange (LME) is poised to expand its global metals warehousing network into Hong Kong before the end of 2024, according to three sources familiar with the situation. This move aims to facilitate access to mainland China, the largest consumer of industrial metals.
Since acquiring the LME in 2012 for $2.2 billion, the Hong Kong Exchanges and Clearing (HKEx) has sought to register warehouses in China. The addition of Hong Kong as a warehousing location is expected to significantly enhance LME trading volumes.
Interest from regional companies in using Hong Kong as a storage alternative to mainland China has been noted. An LME warehouse in Hong Kong could symbolize deeper cooperation between Mainland China and Hong Kong.
The LME has indicated that while the process of listing a new location may take time, they are making progress and anticipate providing a detailed update by year-end. Positive feedback has been received from logistics companies and stakeholders in Hong Kong.
Currently, the LME is exploring various sites, including temporary warehousing at the port, with plans to eventually establish facilities further inland in the New Territories to improve access for trucks coming from China. Some zinc and copper producers in Southern China have expressed interest in utilizing Hong Kong for metal storage.