LME Chief Executive Matt Chamberlain: expects to add one to two new warehouses in Hong Kong this year, with metal storage capacity increasing to a maximum of 30,000 tons.

The London Metal Exchange (LME) under the Hong Kong Stock Exchange (00388) started operating its warehouse network in Hong Kong since mid-July last year. Up to now, 7 operators are managing 15 LME-accredited warehouses, storing a total of approximately 25,000 tons of metal. The CEO of LME, Garry Jones, stated that it is expected that only one or two new warehouses will be added in Hong Kong this year, with the issue of land scarcity being the biggest challenge as suitable locations are becoming limited. He estimates that the maximum metal storage capacity in Hong Kong could be expanded to 30,000 tons. To reach the level of metal storage in other Asian regions such as South Korea's Gwangyang, Singapore, or Kaohsiung City in Taiwan, where an average of 200,000 to 250,000 tons of metal is stored, new land and warehouse construction will be required. He believes that the northern urban area is a suitable location for warehouses, as most of the trade with the mainland of China relies on truck transportation, and the area has a geographical advantage being close to the mainland. However, Garry Jones mentioned that warehouses are typically built by land developers, then operated by operators, and that warehouses have high floor load capacity requirements, which may not necessarily maximize profits for landowners. Therefore, cooperation with the government and industry is needed to emphasize the benefits of building metal warehouses for the commodity ecosystem and the economy of Hong Kong, making the economic benefits of metal warehouses clearer to the outside world.