Middle East war offers Hong Kong a golden opportunity
The war has driven home how well suited Hong Kong is to becoming an alternative to Dubai, a major gold trading hub
Meanwhile, mainland Chinese and other Asian manufacturers importing copper, aluminium and other industrial metals are increasingly turning to Hong Kong as a secure base for stable supplies. One reason is their need to tap into the city’s financial markets to hedge against price volatility driven by geopolitical tensions such as from the Iran war.
Suddenly, demand for storage is outstripping supply. Manufacturers and traders need Hong Kong to expand its warehousing capacity and want to make greater use of its hedging tools to manage risks. That is something to which the local government needs to pay special attention, according to Clara Chan Yuen-shan of the Federation of Hong Kong Industries.
The London Metal Exchange, a subsidiary of Hong Kong Exchanges and Clearing (HKEX), operates 15 local warehouses, storing roughly 24,000 tonnes of non-ferrous metals as of March. Though a big jump from about 8,000 tonnes in 2024, local capacity still can’t meet client demand.