EXCHANGE NEWS - HKEX look to 'physicalise' China metal market with new spot platform

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Kathleen Retournekathleen.retourne@fastmarkets.comJoint News Editor - Europe+44 (0) 20 7337 2144

London 10/06/2016 - Hong Kong Exchange & Clearing (HKEX), the parent company of the London Metal Exchange (LME), is in the process of preparing a spot commodities trading platform in China, the company said.

Initially the platform would start with major base metal products and would then gradually expand to other product categories. Operations are expected to commence in the first half of 2017.

The platform would mirror the LME’s model and be based in Qianhao, Shenzhen.

“Our goal is to leverage our experience in launching new initiatives with the mainland and the LME’s successful model to ‘physicalise’ the mainland’s commodities market,” a spokesperson for the exchange told FastMarkets.

The platform would create an “effective market” that would include commodity users as well as intermediaries that would provide trading, logistics and financing services.

“We aim to provide a sophisticated trading venue with related infrastructure and offer various trading models, settlement, physical delivery, financing, logistics, information services etc,” he added.  

HKEX and the LME have been vocal about their desire to increase their footprint in China, but have come up against opposition.

While the exchanges have yet to build warehouses in this region it is thought that it could use its new LME Shield warehouse-receipt system against the contracts.

(Editing by Tom Jennemann)



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