The remarks by Bonnie Chan came as the London Metal Exchange (LME) on Tuesday approved an additional three warehouses in Yuen Long to store metals such as aluminium alloys, primary aluminium, copper and nickel, bringing the total number of such licensed facilities to seven.
LME approved the first four warehouses last month, and they will start operating from July 15.
Speaking at the LME Asia Metals Seminar in Central, Chan said the latest approvals represent a milestone for the city as it allows Hong Kong to start developing a “vibrant commodities ecosystem” to drive long-term demand, while reinforcing the city’s status as a global financial centre.
“LME stocks have been migrating to Asia for a long time,” Chan told participants, many of whom are metal traders and investors from around the world.
“China’s move to import large quantities of metals since 2020 has accelerated this trend.
“Also China’s ambitious decarbonisation commitments are likely to see its demand for metals increase significantly.
“Hong Kong becoming an LME delivery point will strengthen the links between the mainland physical metals market and the international pricing on the LME, create more market arbitrage opportunities, close gaps in delivery networks, and reduce logistics cost with road connectivity to southern China.”
Chan also pointed to the successful listing by mainland battery giant CATL yesterday as a typical example of how metals play a role in leading the global green transition.
Speaking at the same event, Financial Secretary Paul Chan said the SAR government aims to further boost local commodity trading activities by cutting the relevant profit taxes by half.
“The progress is impressive,” Chan said.
“Within just a few months, seven warehouses have already been approved.
“We are also moving forward with policy initiatives to drive this development.
“For example, as announced in the recent Budget, we will introduce a 50 percent profits tax concession for eligible commodity trading activities, and we aim to bring the relevant bill to the Legislative Council by the end of this year.”
Noting that trading volumes of global non-ferrous metals rose by 20 percent year on year at the LME, with impressive demand for new energy metals, Chan said the city is well positioned to harness the growth momentum, given its close proximity to the mainland, which is a leading producer and consumer of such metals.
