* Plays down delivery expectations for warehousing ambition
* Consultation completed on global warehousing network
reform, no decision yet
By Susan Thomas
LONDON, Oct 15 (Reuters) - The London Metal Exchange (LME)
will not be able to open metal warehousing facilities in
commodity consuming giant China any time soon, LME chief
executive Garry Jones said on Tuesday, scaling back expectations
for its biggest ambition.
The LME, the world's biggest marketplace for industrial
metals such as copper and aluminium, is likely to be the first
to win permission and get round the ban on foreign bourses
setting up depots in mainland China.
"One of our goals is to have warehouses in China, that will
be a big step forward if that was to be allowed," Jones told a
conference in London.
But he played down expectations for a swift move forward.
"The change of the rules in China is some way off. I think
we are dreaming if we think we will have warehousing there any
time soon," Jones said.
The LME has sought for many years to set up delivery
networks in China to grow its business.
Such a move would be a triumph for the LME's new owner, Hong
Kong Exchanges and Clearing (HKEx), whose chief
executive Charles Li promised, during the $2.2 billion takeover
last December, to bring LME-registered warehousing to China.
The LME is grappling with its global warehousing system,
consulting with Britain's Financial Conduct Authority (FCA) on
proposed sweeping changes to storage policy after complaints
from end users including major beverage can makers about long
wait times for metals and inflated costs.
To support physical delivery of its contracts, the LME
approves and licenses a network of more than 700 warehouses
across 36 locations around the world.
But the business has stoked controversy as warehouse firms
have made money by building up stocks and allowing queues to
grow for clients seeking to withdraw material, all the time
charging rent for storage.
End users say those steps have caused long wait times in
warehouses which have distorted supplies and inflated physical
prices to record highs.
The LME launched a consultation on the proposals in July,
and is still considering the responses from the metals industry.
It is due to hold a board meeting this month to discuss the
plan, but there is no date yet for an announcement.