London Metal Exchange plans to build a warehouse in Hong Kong to strengthen global logistics.

The Foreign exchange gold 50 point spreadLondon Metal Exchange (LME) is considering the possibility of listing Hong Kong as an LME warehouse location, its parent company's CEO said on Thursday. This move aims to strengthen its global logistics network.

Since the Hong Kong Exchanges and Clearing Limited (HKEX) acquired the LME for $2.2 billion in 2012, registering warehouses in China, the world's largest consumer of industrial metals, to store LME-traded metals has been a strategic goal.

The exchange recently announced that it is seeking to expand its global warehouse network to include the port of Jeddah in Saudi Arabia. Additionally, Reuters reported in January that the exchange is also considering opening a warehouse location in Hong Kong.

Bonnie Chan confirmed the Reuters report, stating: "We recently commissioned a third-party feasibility study on this idea and received tremendous support from the local market."

She added: "Setting up an LME warehouse in Hong Kong can strengthen the link between the physical metals market in mainland China and LME international pricing. This can create more market arbitrage opportunities, fill gaps in the delivery network, and improve logistics costs with road connections to southern China."

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