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Peggy Sito

The approval of the first four official London Metal Exchange (LME) warehouses in Hong Kong gives a long-awaited boost to the city’s ambition of playing a more integral role in global metals trading.
Many industry leaders, including Tiger Shi, CEO of Bands Financial, and Clara Chan, CEO of Hong Kong-listed Lee Kee Group, believe the development marks a pivotal step in strengthening the city’s position as a strategic commodities hub in Asia.
The establishment of the LME warehouses in the city will also help align commodity prices in mainland China with the international market, they said.
The warehouses mark “a major step forward in integrating the international and Chinese base metals markets”, Shi said in an interview. They also align with efforts to bolster Hong Kong’s role in commodities trading, after Chief Executive John Lee Ka-chiu said in October that the city would develop an international gold trading market.
The LME approved the establishment the warehouses in Hong Kong on April 15, following the exchange’s approval of Hong Kong as an LME warehouse location on January 20. LME has been a wholly owned subsidiary of stock exchange operator Hong Kong Exchanges and Clearing for 13 years.
The LME does not own or operate such warehouses; it authorises companies to store LME-registered metals on behalf of warrant holders.
Two of the Hong Kong warehouses will be operated by GKE Metal Logistics in partnership with China Resources Logistics. The others will be run by Henry Diaper & Co with Sinotrans (HK) Warehousing, and PGS (East Asia) with SF Supply Chain.
These facilities will store various metals, including aluminium alloy, copper, nickel, lead, tin, and zinc. The LME’s criteria for warehouse locations include robust fiscal and regulatory systems, good transport networks, duty-free storage capabilities and political and economic stability.

“Hong Kong’s solid legal framework and regulatory environment will enhance its role in risk management and supply chain efficiency,” said Chan of Lee Kee, a Hong Kong-based supplier of non-ferrous metals that operates across Asia.
Chan is also a member of a private think tank, The Better Hong Kong Foundation, which said in a January report that a Hong Kong commodities market focused on materials critical to clean energy and other emerging industries would elevate the city’s importance in global trade.
China is the largest non-ferrous metals producer in the world as well as the largest consumer of six common non-ferrous metals: copper, aluminium, zinc, lead, nickel and tin. The mainland’s trade in non-ferrous metals was US$368.79 billion in 2024, an increase of 11.4 per cent from a year earlier. The total profit of large non-ferrous-metal enterprises is expected to reach about 420 billion yuan (US$58 billion) in 2025, an increase of more than 10 per cent, according to a Xinhua report in January.
Increasing demand for electric cars and their components, particularly batteries, is a major factor driving growth in the non-ferrous metals market.
The proximity of Hong Kong to the mainland positioned it as a natural pricing hub, and would help cross-border price differences converge, according to Shi.
John Browning, co-founder of Bands Financial and a former LME board member, said location played an important role in commodities pricing.
“Pricing depends on quality, delivery dates and logistics costs,” Browning said in a Bands LinkedIn post on Friday. “The establishment of the warehouses in Hong Kong will help align domestic and international prices, addressing the divergence often seen in China’s domestic market.”
LME-approved warehouses would also provide cost-effective and safe delivery channels for metals trading, Shi said.
The opening of the Hong Kong warehouses, which would join a network of more than 450 LME-approved facilities in 33 locations around the world, would kick off a true ecosystem, said Shi, who is also a member of the LME User Committee.
“The [proximity to China] will shorten delivery time and let players take lesser investment risks,” he said. “When the warehouses are here, banks will come to do business, not to mention the benefits for the warehousing and logistics sector. For finance companies like us, we will see more business opportunities.”
LME, founded in 1877, traded 178 million lots of metals last year, equating to US$18 trillion and 4 billion tonnes, according to its website.


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The development marks a pivotal step in strengthening Hong Kong’s position as a strategic commodities hub in Asia, industry leaders say


The development marks a pivotal step in strengthening Hong Kong’s position as a strategic commodities hub in Asia, industry leaders say.


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Why the London Metal Exchange’s Hong Kong warehouses matter to the city’s financial status

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The development marks a pivotal step in strengthening Hong Kong’s position as a strategic commodities hub in Asia, industry leaders say

The development marks a pivotal step in strengthening Hong Kong’s position as a strategic commodities hub in Asia, industry leaders say