LME CEO on Business Strategy, Metals Market

I guess I'll start off by saying what your priorities are going into this week and what your key focus is when it comes to these Asian markets. Yeah, perfect. Well, well, thanks, Thanks for having me. And it's, it's great as always to be, to be back in Hong Kong for, for LME week Asia. You know, I, I think this is a really well timed conference because you, you showed the, the copper numbers just now and there's obviously been a lot of action in copper this year. I've seen the price go up to $11,000 on speculative interest driven by the electrification story long term and then come down a little bit driven by concerns around Chinese demand. And I think it's really great be here in Hong Kong with really the whole of the Chinese and and the broader Asian metals industry in town to kind of hear about about the outlook, how people are feeling. I always get great insight and, and it's a fantastic event. And you know, the LME has been doing pretty well lately when it comes to that recovery in volumes since the nickel crisis, if you will. What's really been driving that? Yeah. So we've been really pleased by by the volumes this year. So volumes on the market kind of up over 30% and open interest up over 20%. I think there's a few drivers behind that. One, as you say, is the build back from nickel. We've invested a lot of time and and our market has been really generous in working with us to to recover from that nickel situation. And so there's a specific nickel story and nickel volumes up over 80% year on year as we've seen investors and confidence return to that market. But then more broadly, we've been investing in a whole bunch of modernisation like our closing prices. So we now do closing prices in a much more deterministic way and we've seen that's brought new users into the market. And then of course, there's a macro story story about the electric economy, about artificial intelligence, demand for copper, etcetera. So I think you've got a combination of positive factors which are driving that, that really positive increase, as you say. And being in Hong Kong, how important is the city for LME as a bridge to China? We've been hearing that perhaps you might be expanding your global Meta warehouses network from the city. Yeah. So the link to China has been crucial for the LME for for for many years now. And, and the acquisition of the LME by Hong Kong exchange back in 2012, I think was a really clear demonstration of that. So we look at every opportunity we have to bring our business closer to our very important stakeholders in China. You know, again, talking about copper, it's been absolutely crucial over the last couple of months that Chinese, the Chinese copper industry has been able to deliver copper into our warehouse network in Asia, IE that we have warehouses that are easy and available to use for all of our Asian customers. So we take every opportunity to continue to grow that warehouse network to make it as easy as possible for our Asian users and of course our users all around the world to participate physically. Would that include Hong Kong and what about the mainland? Yeah. So, so we've talked in the past about our desire if, if our Chinese partners would be, would be willing to, to have warehouses in, in mainland, in mainland China. Now we absolutely understand that that's a decision that for, for China to take. And we'll be, we'll be China's partner even when that works. But, but you're absolutely right. You know, the, the locations such as such as Hong Kong providing that bridge into the mainland are very exciting. So, yeah, we'll be saying a little little bit more about that in our forthcoming seminar. So I, I don't want to spoil the surprise, but, but I think it's absolutely right to say that Hong Kong is very much at the centre of our plans for that bridge into the mainland. I did want to dig a little bit deeper into that because is that sort of, you know, a bit of a consolation prize and is it worthwhile from a strategic perspective given limited warehousing space in Hong Kong, given that it's not a major transit point at this stage? Yeah. So, so I, I, I certainly believe that, you know, that our mission is to get as close as possible to the mainland as possible. So I, I wouldn't really use the terms of consolation prize. I think we, we already have this incredibly effective warehousing network close to our mainland users. So, so to take it, you know, the example of of Korea or of Johor in Malaysia or of course, of course, Kaohsiung, you know that we have these very convenient ports already where mainland users can easily ship metal to, as we've seen in the last couple of months, where significant quantities of Chinese copper have been delivered into our warehouses against that, that high price. So, so I, I don't think this is a, a binary question. Warehouses in the mainland or not warehouses in the mainland. It's about creating as, as effective a network across the broader Asian region so that everyone in Asia, including in mainland China has that easy access to LME warehousing. And Matthew, as you're recovering from the the nickel crisis, as you say, how confident are you that that's behind you? And have you had any conversations with Xiang Guangdong Sing Shan? Yeah, so, so with with nickel, we have invested a huge amount of time and resource and our market has as well, I must say in terms of of building the market back and and yeah, a number of important learnings. So things like our OTC disclosure. So we now see who is behind over the counter positions on our base metals, things like our daily price limits that we've put a lot of effort into calibration. So you never want to say job done in a situation like this because we can always continue to improve. But you know, I I strongly believe that those learnings that we took from that independent report and have spent the last two years embedding have been hugely valuable for, for our industry. And sorry, it just broke up on the second part of your question.