Following is a question by the Hon Andrew Yao and a written reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (July 15):
 
Question:
 
     The Outline of the National 15th Five-Year Plan clearly states, for the first time, that it supports the creation of a commodity trading ecosystem in Hong Kong. While Hong Kong currently has 15 approved warehouses by the London Metal Exchange (LME), a subsidiary of the Hong Kong Exchanges and Clearing Limited (HKEX), with a total storage capacity of 25 000 tonnes, this is reportedly only one-tenth of the average storage capacity of similar warehouses in other parts of Asia. There are views suggesting that the Government should further expand the commodity market to enhance its competitiveness comprehensively. In this connection, will the Government inform this Council:
 
(1) of (i) the locations, (ii) the storage capacity and (iii) the types of metals currently stored at each of the 15 LME-approved warehouses;
 
(2) as it has been reported that LME permits the delivery of seven metals (copper, aluminium, zinc, lead, tin, nickel and aluminium alloys) in Hong Kong, whether the Government has compiled statistics on (i) the respective stockpiles of the aforesaid seven metals in Hong Kong; if it has, set out the relevant figures; (ii) which of these metals is the most actively delivered in Hong Kong, and the relevant details; (iii) whether the Government will co-ordinate further with HKEX and LME to regularly publish commodity storage and trading data to help the industry accurately gauge market demand and developments in the industrial chain;
 
(3) as it has been reported that LME may approve the establishment of warehouses at any location within Hong Kong, not limited to sites near the port, whether the Government will proactively identify and plan for the use of more non-port land for storing commodities; whether the Government is aware of the specific requirements for warehousing facilities, including security, floor space, and transport and logistics infrastructure; if so, of the details;
 
(4) given the extremely high demands placed on warehouse loading capacity by commodities (particularly non-ferrous metals), and the current restrictions on land use, whether the Government will remove barriers to the provision of land for commodity warehouses, relax lease conditions, and streamline the approval process;
 
(5) as it has been reported that the authorities plan to earmark approximately 32 hectares of land south of the Hung Shui Kiu Industry Park for the development of a modern logistics cluster, and this land may also be considered for use as commodities warehouses, whether the authorities will set phased targets for establishing commodities warehouses in the Northern Metropolis and assisting the industry in expanding other high-value precious metals businesses (such as silver and platinum); and
 
(6) of the progress of the Government's efforts to attract relevant leading enterprises engaged in commodities (such as state-owned enterprises and central enterprises, as well as international metal industry giants) to establish their headquarters or offices in Hong Kong; and the specific measures the authorities have put in place to support and assist warehouse operators?
 
Reply:
 
President,
 
     The Outline of the National 15th Five-Year Plan explicitly supports Hong Kong in developing a commodity trading ecosystem. As an international financial, trade and shipping centre, Hong Kong will leverage its unique advantages of connecting the Chinese Mainland and the world under "one country, two systems" and proactively align with the Outline of the 15th Five-Year Plan to develop an efficient and internationally competitive commodity trading ecosystem, seizing the opportunities arising from our country being the largest consumer of industrial metals in the world.
      
     In consultation with the Development Bureau (DEVB), the Transport and Logistics Bureau, the Office for Attracting Strategic Enterprises (OASES), Invest Hong Kong (InvestHK) and Hong Kong Exchanges and Clearing Limited (HKEX), the reply to the six parts of the question is as follows:
 
(1) and (2) Since January 2025, the London Metal Exchange (LME), a wholly-owned subsidiary of HKEX, has included Hong Kong as an LME-approved delivery location and begun accepting applications from warehouse operators. As of end-June 2026, a total warehousing area of over 52 000 square metres has commenced operation in Hong Kong, with storage exceeding 24 000 tonnes. The locations, total storage areas, and types of metals permitted for storage across the 18 approved warehouses are set out in Annex.
 
     Among the seven types of metals currently permitted by the LME for delivery in Hong Kong, copper and zinc are the most actively traded in terms of physical delivery. Their inventory levels in Hong Kong stand at 10 700 tonnes and 8 650 tonnes, accounting for 44 per cent and 35 per cent of the total storage respectively.
      
     In accordance with international market practice, the LME publishes daily to the global market, through its official channels and designated financial information platforms, detailed inventory reports and trading data, including specific warrant and data categorised by delivery location (including Hong Kong) and metal type, enabling the industry and market participants to monitor physical metal dynamics and supply chain trends in Hong Kong and global markets. The Government and HKEX will continue to maintain close communication with the LME to ensure the transparent flow of relevant market information, thereby assisting the commodity industry in capitalising the development opportunities.
 
(3) to (5) The Government is leveraging the development of an international gold trading market as an entry point to develop a commodity trading ecosystem. Relevant efforts have yielded phased achievements, including the commencement of the trial operation of the central clearing and settlement system for gold in July this year. The Airport Authority Hong Kong has also launched a thousand-tonne-class warehousing facility project. At the same time, several private institutions (including banks) are actively expanding their storage capacity. Building on the foundation of strengthening our advantages in the gold trading market, we will progressively extend the relevant trading and warehousing infrastructure experience to other precious metals businesses, with a view to establishing a complete a commodity industry chain.
 
     With the continuous development of the commodity trading ecosystem, we anticipate that the demand for relevant warehousing facilities and logistics land will continue to rise. Adopting an industry-led planning approach, the Government has reserved industry land including those for industrial, logistics, and storage uses across various New Development Areas (NDAs) in the Northern Metropolis, which can satisfy the demand for commodity warehousing land. For example, to meet the logistics sector's demand for land, the Government has reserved 32 hectares of land in the Hung Shui Kiu/Ha Tsuen NDA within the Northern Metropolis for the development of a modern logistics cluster. The Government plans to invite expressions of interest within this year from the logistics industry (including operators interested in developing commodity warehousing facilities in Hong Kong) for the first parcel of land within the cluster, thereby enabling the Government to formulate a development model that meets with industry needs.
      
     As another example, the permissible land uses of the 23-hectare Hung Shui Kiu Industry Park have been widened to encompass various industries, and can accommodate the development of commodity warehouses or ancillary facilities, and the statutory plot ratio restrictions have been removed to afford greater development flexibility. The Hung Shui Kiu Industry Park Company Limited has commenced operations and is formulating concrete development plans and approaching enterprises that might be keen to establish their operations in the Industry Park with a view to accelerating industry introduction. In addition, the Northern Metropolis Development Bill, which was introduced into the Legislative Council for First Reading on July 8 this year, will facilitate the planning and construction of commodity warehouses or ancillary facilities. This includes facilitating the adoption of innovative designs, materials, and construction techniques in relevant projects, or enhancing the quality, functionality, or sustainability of their design and construction. Should rezoning be required to accommodate commodity trading, streamlined town planning procedures can be applied, effectively shortening the processing time from at least nine months to two months. The DEVB has also introduced administrative measures to facilitate industry development, setting time limits for critical approval processes and strengthening internal monitoring and co-ordination. These measures will accelerate the approval and construction of industry structures.
 
(6) The Financial Services and the Treasury Bureau (FSTB), in collaboration with the OASES and InvestHK, has been promoting Hong Kong's strategic direction and specific measures for developing a commodity trading ecosystem through various meetings, visits and major events (such as industry conferences, exhibitions, and seminars) to attract relevant leading enterprises to establish a presence in Hong Kong. With the support of InvestHK, a number of commodity warehousing and logistics companies have established delivery warehouses for the LME and the Chicago Mercantile Exchange in Hong Kong, actively integrating into the city's commodity ecosystem.
 
     In selecting suitable sites for the warehouses, the operators have to hold in-depth discussions with the relevant warehousing industry players and landowners, which mainly involve the circumstances of individual facilities (such as loading capacity and infrastructure requirements) and other business considerations. In the course of discussion, technical issues involving planning permissions, lease conditions, etc, may also arise. The FSTB, in collaboration with relevant bureaux and departments, has been maintaining communication with relevant industry players, and held meetings to provide relevant information and guidance.

Ends/Wednesday, July 15, 2026
Issued at HKT 12:30

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