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| LME eyes Taiwan warehouse, port says by end-2011 |
| 29-JUL-2010 Intellasia | Reuters |
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| 29 Jul, 2010 - 7:00:00 AM |
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The London Metal Exchange will apply late next year for a storage and shipping warehouse in southern Taiwan, its fourth in Asia and the closest to mainland China, the world's top metals consumer.
The exchange picked the Taiwan city of Kaohsiung for its warehouse during a visit in January and is expected to apply in October 2011 after Kaohsiung's port completes an appraisal, port business development specialist Wang Yen-chao said on Tuesday.
At a briefing in London, LME chief executive Martin Abbott confirmed the exchange was looking at launching warehousing in Taiwan, but added it was not likely to happen this year. [ID:LDE66Q16K]
Improving relations between Taiwan and China, which on June 29 signed a landmark free-trade deal, and the island's location close to Guandong province, one of the major copper and aluminium fabricating bases in China, make Taiwan an attractive location for an LME warehouse.
The government in China, the world's biggest consumer of industrial metals, does not allow any LME-registered warehouses. LME metals into China have typically been shipped from warehouses in Singapore or South Korea.
"They thought the port of Kaohsiung's position was pretty good, with ample shipping routes to other ports," Wang told Reuters.
The LME does not own or operate warehouses. The exchange only authorises warehouse companies and the warehouses they operate to store LME approved brands on behalf of warrant holders.
Combined stockpiles of base metals at LME warehouses stand at nearly 6 million tonnes, the bulk of them aluminium at around 4.4 million tonnes.
A recent drawdown in LME inventories, suggesting firm demand, had helped boost base metals prices, with three-month copper CMCU3 touching 10-week highs above $7,100 a tonne on Monday.
Copper stocks are now down 25 percent from levels in February, which were the highest since October 2003, while aluminium inventories have come off record levels of above 4.6 million tonnes hit in January.
There are more than 500 LME approved warehouses in around 38 locations covering the United States, Europe, the Middle and the Far East, according to the exchange's website (www.lme.com)
http://www.reuters.com/article/idUSTOE66Q03L20100727
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