LME selects five operating firms in Korea

The London Metal Exchange (LME) finally approved five companies in Korea as LME operators in an executive committee Oct. 8, of which three companies are for the Port of Pusan and two companies for the Port of Kwangyang.

On that day, Kwangyang LME warehouse construction began in the rear industrial complex of the Port of Kwangyang.

With this, South Korea will be the third best LME equipped country in Asia following Singapore and Japan and thirteenth in the world.

The LME, founded in 1877, is the largest Metal Futures and Option Exchange, as one of two global leading raw materials businesses, the other being the CBOT (Chicago Board of Trade), and does more than 10 billion dollars in transactions daily.

In the Port of Pusan, Global Enterprises will collaborate with Henry Bath in the USA while Kukbo Special Logistics seems likely to cooperate with Steinbeck in the Netherlands. Dongyang Logistics will work together with Conelder Co. in from the Netherlands. In the Kwangyang area, the Korea International Terminal will work together with Steinbeck, Global Enterprises and Conelder Co.

Domestic LME warehouses will handle aluminium, copper, nickel and tin. Experts expect that LME warehouse will likely take off within 2-3 years, surpassing Singapore, which handles a total of 400,000 tons yearly.

Experts from the Ministry of Maritime Affairs and Fisheries (MOMAF) expect that Japan and China are running short of treated aluminium due to increased consumption, making Kwangyang the Northeast Asian hub supply center for the material. As of 2000, nonferrous metals import demands in Northeast Asia are 2.2 million tons for Japan, 520,000 tons for China, 1.56 million tons for Taiwan and 1.33 million tons for Korea .

In the mean time, the Kwangyang LME warehouse construction began with the Deputy Minister of MOMAF, Yu Jeong-seok, lawmaker Mr. Jeong Cheol-ki, and the Deputy Governor of South Cholla province, Im In-cheol in attendance. The warehouse will be built by Global Enterprises with an investment of 12.3 billion won for the 6,000 pyoung of back areas. If finished by March 2003, it will be registered in the Guinness Book as the largest LME warehouse in a single building.

This warehouse will be equipped with state-of-the-art humidity and temperature controls, a CCTV system, and will be able to accommodate a maximum of 80,000 tons of cargo. The complex, designated as Tax Free Zone, will belong to Global Enterprises for between 15 and 20 years after which it will be returned to the government.

The LME is the global center for nonferrous metals, located in London. It was established in 1877 and started to advance business in 1882. Currently, 7 items, including copper, zinc, tin, wax, aluminium and nickel are traded there. Other nonferrous metals including gold and silver, are traded in Comex (Commerce Exchange Pte.) in New York. There are about 400 LME warehouses in 12 countries.