The London Metal Exchange (LME) has approved Hong Kong as a warehouse delivery point, aiming to enhance access to mainland China, the world's largest metals consumer. This move, a strategic goal since 2012, will allow Hong Kong warehouses to store all six primary metals traded on the LME. Despite higher costs in Hong Kong, investors are drawn to its proximity to China. While no financial incentives have been agreed upon with Hong Kong authorities, LME CEO Matthew Chamberlain believes the warehousing structure will remain economically attractive.
The London Metal Exchange on Monday approved Hong Kong as a warehouse delivery point, seeking to boost access to mainland China, the world’s biggest metals consumer.
Despite high costs in Hong Kong, there has been significant interest among warehouses, landlords and metals owners, LME CEO Matthew Chamberlain told the Reuters Global Markets Forum on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland.“Given the cost of land in Hong Kong, it will likely require additional government support to allow the warehouse to be built,” Arthur Fan, head of Asia-Pacific at brokerage Marex, said in a statement.
In an internal presentation more than a year ago, the LME said that warehouse rents would have to be subsidised by the Hong Kong government to make it commercially viable.
LME CHINA HONG KONG WAREHOUSES METALS
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