Chairman at China's Tongling Nonferrous proposes to build LME warehouses in Shanghai

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Ding Shiqi, chairman of China's Tongling Nonferrous Metals Group SZSE:000630 and a delegate for the National People's Congress, has proposed building a warehouse delivery point for the London Metal Exchange (LME) in Shanghai, state-run media Securities Times reported on Tuesday.The proposal was made during China's annual parliamentary meeting during March 5-12."The LME has not had any warehouse delivery points in mainland China, so Chinese companies need to undertake high physical settlement costs including freight and insurance fees, long delivery time, risks of delivery delay and 'short squeeze'," Ding was cited by the Securities Times as saying.Ding also suggested including warehousing and logistics in the scope of financial support for Shanghai's bulk commodity supply chain, and providing supporting services such as warehouse receipt pledge financing, the report said.The LME, owned by Hong Kong Exchanges and Clearing HKEX:388, last year added Hong Kong to its existing warehousing networks as it sees the Chinese-controlled city as a gateway to top metals consumer China.The LME is the world's largest and oldest industrial metals trading venue while Shanghai is a financial hub of China.Tongling Nonferrous Metals is one of China's leading copper smelters.China is the world's largest consumer of various industrial metals including copper, aluminium and nickel.

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