SEATTLE (Scrap Monster): Hong Kong has been authorized as a warehouse delivery location by the London Metal Exchange (LME). Access to mainland China, the country that consumes the most metal worldwide, is anticipated to be improved by the ruling.
LME stated that primary aluminum, copper, lead, nickel, tin, zinc, and aluminum alloys registered with LME will all be permitted to be stored in the new warehouse. It becomes a part of the exchange's current global network of 32 locations. There are up to 465 authorized warehouses spread between these 32 locations.
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Despite being seen as a high-cost jurisdiction, Hong Kong was chosen as the new warehouse site. Compared to other places, storage in Hong Kong is expensive. Companies are allowed to charge up to 61 cents per metric ton for the storage of metal in Hong Kong warehouses. This contrasts with South Korea's and Singapore's current maximum copper prices of 51 cents per metric ton.
In order to construct the facility, LME had previously asked for more government assistance in the form of financial incentives from the relevant authorities. However, according to Matthew Chamberlain, CEO of LME, the authorities have not yet approved any such incentives for international warehousing businesses. But because of its closeness to mainland China, the Hong Kong warehouse will be very advantageous to investors, he continued.
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