EXCLUSIVE-CME to list Taiwan, Hong Kong warehouses in Asia aluminium push, sources say

By Tom Daly and Pratima Desai

LONDON, Feb 12 (Reuters) - CME Group is set to approve Taiwan and Hong Kong as warehouse locations for aluminium, three sources with direct knowledge of the matter told Reuters, as the U.S. commodity exchange steps up its challenge to the London Metal Exchange (LME) in Asia.

The new planned locations would herald a significant expansion for CME in the region that last year accounted for two-thirds of global production of the metal used in packaging and transport.

CME's CME.O Asian base metals warehouse footprint is currently confined to Malaysia, Singapore and South Korea.

Warehouse operators C. Steinweg and Pacorini Global Services have applied to list storage facilities that can take metal deliverable against CME's Comex aluminium futures ALIc1 in Taiwan's port of Kaohsiung, previously unreported notices on the exchange's website show.

CME, Steinweg and Pacorini all declined to comment.

Steinweg and Pacorini already operate LME warehousing in Kaohsiung, which holds just under 10% of total LME aluminium inventories MALSTX-TOTAL of 483,550 metric tons.

Two warehousing industry sources said the firms applied to list in Taiwan after talks with CME, adding that representatives of the exchange recently visited the island to inspect warehouses and get to know its regulations.

The sources declined to be identified as the talks are private.

Unlike Comex copper HGc1, where all metal is delivered duty-paid into warehouses in the U.S., Comex aluminium is delivered into bonded storage. That makes it more attractive to anyone outside the U.S., said a third source who works in derivatives trading.

Comex-approved Asian aluminium brands include metal from Indonesia's Inalum, Malaysia's Press Metal PMET.KL, several Indian smelters and ingots from Aluminum Corp of China Ltd 601600.SS, 2600.HK, known as Chalco.

HONG KONG SITES IN DEMAND

Meanwhile, two more CME notices in late January showed that UK-based warehousing firm Henry Bath and Singapore-headquartered GKE Metal Logistics have applied to list aluminium storage in Hong Kong, with the latter also seeking to house lead.

Henry Bath declined to comment, while GKE did not respond to a request for comment.

The emergence of Hong Kong as a possible CME aluminium delivery location comes hard on the heels of the LME's approval of more than a dozen warehouse facilities in the Chinese special administrative region since early last year.

With space at a premium and rents high, those warehouses initially struggled to attract metal, but LME copper stocks in Hong Kong MCU-CHHONG-TOT recently rose above 10,000 tons after delivering to the LME turned profitable for Chinese producers.

There is currently no aluminium in Hong Kong LME warehouses.

One of the sources said Hong Kong appeared to make little sense for now, but noted there were decent flows of aluminium into Kaohsiung.

Comex aluminium stocks globally AL-TTLTTDY-STX are at just 3,834 tons, down some 80% since April 2025, with most of the metal in Asia.

Comex's aluminium contract was launched in 2019, but trading volumes remained negligible until 2023 when they accounted for 1.6% of the global total. In 2024, they picked up to 1.9% and dipped again last year to 1.2%, Reuters calculations show.

The LME's aluminium futures contract amounted to 80.6% of total futures trade in the metal last year, while the Shanghai Futures Exchange's share was 18.2%.