https://arab.news/b2375
RIYADH: Jeddah is set to become a significant hub for copper and zinc metals as the London Metal Exchange plans to establish a new warehouse in the city.
To enhance Saudi Arabia’s position as a global alloy center, the LME is consulting to fine-tune its warehouse location framework, specifically addressing provisions related to depot operator insolvency to ensure metal owners’ access to their assets remains straightforward.
Pending the consultation’s conclusion on April 30, 2024, and subsequent policy adjustments, the coastal hubs’ designation as a delivery point will be formalized, marking a new chapter in the city’s and the Kingdom’s industrial and logistical advancement.
Following the standard procedure for location listings, Jeddah will be activated as a delivery point three months subsequent to the approval of the initial warehouse company in the area.
LME CEO Matthew Chamberlain emphasized the exchange’s commitment to expanding its network, noting the Kingdom’s growing influence in the international alloy industry.
“Saudi Arabia is an increasingly important global metals hub, and Jeddah fully meets with the operational and logistical criteria for new warehouse locations — such as being an important area of net consumption and having an effective transport network,” he said.
Echoing the enthusiasm, Farooq Shaikh, CEO of LogiPoint, a leading company operating a network of integrated management parks in Saudi Arabia, welcomed the initiative, seeing it as a testament to the success of the Kingdom’s National Industrial Development and Logistics Program.
“We very much welcome the LME intention to list Jeddah as a new LME Delivery Point for copper and zinc, and we are very pleased that the Jeddah Islamic Port and the Bonded Re-Export Zone meets the LME’s exacting standards,” Shaikh said.
“We look forward to a long future of cooperation with LME and to further developing our relationships with the international metals community to make Jeddah and the Kingdom of Saudi Arabia a major metals logistics hub servicing the Middle East, North and East Africa regions,” he added.
The program focuses on transforming the Kingdom into a leading industrial powerhouse and a global supply chain hub in promising growth sectors, including industry, mining, energy and logistics.
Established in 1877, London Metal Exchange stands as the international hub for industrial metals trading, handling the majority of non-ferrous alloy futures transactions.
In 2023, it saw 149 million lots traded, representing $15 trillion and 3.5 billion tonnes in notional terms, with the market’s open interest peaking at 1.9 million lots.