Key facts
- Three Chinese brokerages, Yongan Futures, Orient Futures, and Guotai Junan Futures, are seeking membership in the London Metal Exchange (LME).
- The move aims to increase China's representation on the LME, which is the world's largest marketplace for industrial metals.
- Chinese firms are looking to capture a larger share of revenue from metals derivatives trading and expand globally.
- Guotai Junan Futures is actively applying, while Yongan Futures is preparing its application after setting up a UK entity.
- CLSA UK, a subsidiary of China's CITIC Securities, was recently approved as an LME member.
Three Chinese brokerages, Yongan Futures, Orient Futures, and Guotai Junan Futures, are preparing to apply for membership in the London Metal Exchange (LME), the world's largest marketplace for industrial metals. This strategic move signifies an effort by Chinese firms to expand their global presence and capture a greater share of revenue from metals derivatives trading.
Currently, only six of the LME's over 40 clearing members are Chinese, a figure the applicants aim to increase. Guotai Junan Futures is already in the process of submitting its application, while Yongan Futures is preparing its own after establishing a UK entity and hiring Zhang Wei to lead the LME approval process. Orient Futures also has plans for membership, though the timeline remains unclear.
These brokers are significant players on China's Shanghai Futures Exchange and have expanded into Singapore. Yongan International Financial (UK) recently stated its aim to become a leading cross-border integrated financial services provider by leveraging London's status as an international financial center. The LME, owned by Hong Kong Exchanges and Clearing, recorded record futures trading volumes last year, with revenue primarily generated by non-Chinese clearing members.
In a related development, CLSA UK, a unit of China's CITIC Securities, was approved as an LME member last month. An LME spokesperson acknowledged China's fundamental role in the global metals market and its significant activity on the exchange, while declining to comment on specific applications.