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 London Metal Exchange

(1) What is the London Metal Exchange (LME)?

   The London Metal Exchange is the world's largest market in options and futures contracts on base and other metals. Founded in 1877, LME has operated for nearly a century and a half. The exchange conducts over US$12 trillion in trading business annually. LME members include major global mining companies, metal refiners, business investment banks, metals traders, and manufacturing companies.

 

     LME created the London Metal Exchange Index (LMEX) in 2000 London Metal Exchange Index (LMEX) as a real-time, global index of commodity pricing for LME's six primary nonferrous metals, including copper, aluminum, lead, nickel, zinc, and tin. The index allows investors to buy and trade option contracts for these commodities without incurring related delivery, warehousing, and exchange fees. LME is one of the world’s largest metals trading exchanges and regularly handles over 80% of global futures trading business in its nonferrous metals.

 

    On June 15th, 2012, Hong Kong Exchanges announced to sign a framework agreement with HKEx Investment (UK), Limited, and LME Holdings Limited (LMEH). Furthermore, on following December 6th, Hong Kong Exchanges successfully acquired London Metal Exchanges (LME) for £1.388 billion.

 

   Today, as a subsidiary of the HKEx, LME links metal commodities to industrial buyers in a dynamic, interactive market. LME creates value through traditional market mechanisms and a 24-hour trading day.
 

Discover more about LME online
  • LME official website: //www.lme.com/

    HKEx official website: //www.hkexgroup.com/eng/index.htm

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  • (2) LME Delivery Points
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  • The Benefits of Creating a Global Network of LME Delivery Points
  • The LME network of delivery points allows industry to transfer nonferrous metals from surplus markets to shortage markets. However, such activity is not intended to replace normal commodity sales channels, as only a small percentage of transfers involve the physical shipment of nonferrous metal commodities. Moreover, physical transfers are transacted at stable future / actual market prices. Thus, this activity plays an important role in the global trade of nonferrous metals. LME not only provides a bricks-and-mortar marketplace for manufacturers and other LME clients but also, and more importantly, provides a hedge against future price fluctuations.
     

  • General principles for approving new LME Delivery Points (ports)
  •  LME requires that nations hosting LME delivery points have comprehensive and well-run financial and legal systems and a stable political and economic environment. Furthermore, delivery points must be easily accessible to and from transportation networks, have appropriate warehouse facilities and space, and offer a duty-free operating environment.
     

  • Conditions for becoming an approved LME Delivery Point (port)
    National: National laws related to customs treatment, taxes and tariffs, labor, and bankruptcy must meet LME requirements.Port: Port must meet all of the conditions required of an LME delivery port. Upon approval, the port may operate as a physical delivery port for LME’s various nonferrous metal commodities.Warehouse / Storage: Warehouse operators must apply for LME approval and pass all necessary inspection procedures. Only after LME approval is an operator considered an approved warehouse and authorized to accept and store LME goods.
     
  •  The Port of Kaohsiung is Taiwan’s largest international commercial port. The port is strategically located astride main intercontinental shipping lanes and connected via 120 shipping routes directly to 50 countries on 5 continents. Free trade port operations and direct shipping links to all of China’s main commercial ports make the Port of Kaohsiung exceptionally competitive as a logistics and warehouse hub.

     

     Although China is one of the world’s largest consumers of nonferrous metals, it currently has no LME delivery points (ports) to receive and store LME commodities. The approval of the Port of Kaohsiung as an LME delivery point greatly streamlines the shipment of nonferrous metals to China by reducing the time, delay, and costs incurred in processing deliveries to Chinese buyers. Furthermore, as an international warehousing and transshipment hub, the Port of Kaohsiung is attracting new international logistics investment to Taiwan.

     

     As an LME delivery point, the Port of Kaohsiung will reduce the costs of shipping and storing base metals in East and Southeast Asia while raising logistics / supply-chain efficiencies. Reducing delivery times will effectively reduce the exposure of domestic wholesalers and direct buyers to the risks of currency and price fluctuations, increase market price competitiveness, and raise in-market profits.
     
     

  • The 33 LME delivery points (ports) in the global LME network
  • The LME network girds the globe. The Port of Kaohsiung received LME delivery port approval on June 17th, 2013. At the close of 2016, there were 630 approved warehouse operators in the LME network, distributed across 33 locations in 14 countries. Today, LME has approved delivery points in North America, Europe, the Middle East, and Asia. Aside from the Port of Kaohsiung, LME-approved ports in East Asia include Yokohama and Nagoya in Japan; Busan, Incheon, and Gwangyang in South Korea; Johor PTP and Klang in Malaysia; and Singapore.

    Asia (10 delivery points)
     

    Country

       City

    Taiwan

       Kaohsiung

    South Korea

       Busan
       Incheon
       Gwangyang

    Malaysia

       Johor PTP
       Port Klang

    Japan

       Yokohama
       Nagoya

    Singapore

       Singapore

    United Arab Emirates

       Dubai
     
    Europe (15 delivery points)

    Country

       City

    Belgium

       Antwerp

    Germany

       Hamburg
       Bremen

    Italy

       Genoa
       Leghorn
       Trieste
       Ravenna

    The Netherlands

       Rotterdam
       Vlissingen
       Moerdijk

    Spain

       Barcelona
       Bilbao

    The UK

       Liverpool
       Hull

    Sweden

       Helsingborg
     
    North America ( 8 delivery points)

    Country

       City

    The United States

       Baltimore
       Los Angeles
       Toledo
       Detroit
       Chicago
       Mobile
       St Louis
       New Orleans
     
     
    (3) LME-approved Warehouses and Storage Facilities
      Criteria for the consideration and approval of LME warehouses:

    • Convenient delivery terms and conditions
    • Well-developed financial environment
    • Tariff-free free trade environment
    • Political and economic stability
    • Comprehensive legal system

    (4)LME-approved warehouses that are interested to establish operations at the Port of Kaohsiung may apply via any one of the following methods:

    • Register a subsidiary in Taiwan
    • Register a branch office in Taiwan
    • Partner with a current Port of Kaohsiung warehouse operator

    Last updated:2018-03-21
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