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LME holds warehouse talks for China, Southeast Asia

Keywords: Tags  London Metal Exchange, LME, Hong Kong Exchanges & Clearing, HKEx, Liz Milan, warehouse, China, Taiwan Thailand

SINGAPORE — The London Metal Exchange is in discussions about establishing warehouses in China and eventually hopes to set up delivery locations in Southeast Asia.

Extending the LME’s global warehouse network to China will be a priority for the LME and its owner, Hong Kong Exchanges & Clearing Ltd. (HKEx), Liz Milan, managing director of LME Asia, told AMM sister publication Metal Bulletin. "We continue to speak to the relevant people in China, and without a doubt Chinese warehousing remains very important to the LME and something that we are looking to try and get on board."

Market participants had hoped that the HKEx takeover of the LME would expedite the setting up of LME warehouses in China. Milan, who also is head of Asia commodities at HKEx, declined to comment on the status of any discussions about Chinese warehousing.

The LME this week listed Kaohsiung, Taiwan, as a delivery point for base metals and aluminum alloy, taking its total number of Asian locations to nine. Kaohsiung is expected to provide better accessibility to China-based users of the bourse due to its proximity to China.

In the longer term, the LME also hopes to set up additional delivery locations in the region, including Thailand and Vietnam.

"It’s long time frame, because you have to have all the fiscal regimes in place; from determining and identifying an area to becoming a location, you have to get past many things," she said. New locations need to meet conditions including those related to the tax-free movement of material into LME warehouses. "Some markets are more established than others around there," she added.

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