Accreditation by London Metal Exchange a big boost for port
LONDON: Port Klang is poised to become Asia’s leading distribution hub for the London Metal Exchange (LME) following its accreditation as the exchange’s Good Delivery Point.
The move will further enhance Malaysia’s image as a major regional logistics centre for LME trade, according to Port Klang Free Zone general manager Chia Kon Leong.
He said Port Klang’s listing was fast-tracked as it had always been LME-ready with its excellent port infrastructure, strong logistics support and sound operational systems.
Chia said the port was strategically located to capitalise on the burgeoning LME trade from producing countries like Australia and Europe to the vast consuming markets of South East Asia and China/Far East.
Datuk Seri Ong Tee Keat receiving the Letter of Accreditation from Martin Abbott (right) at the LME office in London. With them is Chia Kon Leong (left).
“We reckoned that Port Klang is targeting to receive 150,000 to 200,000 tonnes of metals within the next six months,” he said.
Chia had earlier witnessed the presentation of the Letter of Accreditation from the exchange’s CEO Martin Abbott to Transport Minister Datuk Seri Ong Tee Keat at the LME boardroom in London on Friday.
Established for over 130 years, the LME is the world’s premier non-ferrous metals market, offering futures and options contracts for aluminium and aluminium alloy, copper, nickel, tin, zinc, lead and plastics.
With a turnover in excess of US$3 trillion per annum, the LME also contributes to the UK’s invincible earnings to the tune of more than £250mil in overseas earnings each year.
Port Klang’s listing as a Good Delivery Point was approved by the LME on May 8, thereby allowing the port to receive LME-traded metals since June 10.
The accreditation is of immense significance to Malaysia as there are now only two other approved listed delivery locations in South East Asia, namely Pasir Gudang in Johor and Singapore.
LME delivery points are mainly in major ports around the world, which must meet strict criteria before they are approved for the handling of metals and plastics traded through the exchange.
Chia said Port Klang was strategically located at the crossroads of the world’s busiest shipping lane as well as being the world’s 15th busiest container port and one of Asia’s largest multi-purpose ports.
He said the port was centrally located in South East Asia, close to the huge consumer market in China which had no delivery points despite the enormous volumes of LME metals being shipped there.
“We’re close to consuming areas but away from major producers like those in Australia,” he said, citing BHP Billiton as one of the world’s largest mining companies.
Chia also said Port Klang was unique in a sense as within its free zone, there were companies which could consume such metals.
He said one firm, for instance, could actually get its copper supply from within the free zone, unlike other delivery points which were purely distribution areas.
He added that the listing had enhanced Port Klang’s resilience in facing the recessionary environment as metals needed to be stored due to lower consumption.
“We provide LME traders, warehouse companies and other users with highly competitive rates backed by cost-effective and efficient operations,” he added.
Ong said Port Klang was offering not just one port terminal but two and 405 ha of (Port Klang) free zone as a delivery location.
“And that free zone certainly has vast potentials that will suit the LME’s business purposes,” he noted.
Abbott said the LME appreciated the fact that Malaysia operated a fiscal regime that was encouraging to the international business community.
“With regards to Asia in general, as probably the biggest single growth area for the LME in the next 10 to 20 years, we’re very happy to have Malaysia and Port Klang as our strategic partners in our long-term business growth,” he added.
