London Metal Exchange plans new products, warehouses in China

Jones said that the launch this year of the LME Clear, its own clearing mechanism, had cost the LME 107 million pounds ($172 million). Romnesh Lamba, co-head of global markets at HKEx, said the new clearing house will allow new products to be added and should bring in $90 million to $100 million in extra revenue.

The LME is now expanding into precious metals. It will start running the replacement for platinum and palladium fixes on Dec 1 and has proposed an alternative for the gold fix.

It is also working on introducing two contracts related to steel and aluminum premium swaps next year, and will "revamp" its existing steel contract, Jones said.

Lamba said the Hong Kong bourse was "optimistic" it can replicate its link between Shanghai and Hong Kong stock markets in commodities, although Charles Li said last week there is still no timetable for the introduction of the stock platform.

"There is a lot of interest in linking what is essentially onshore and offshore markets in commodities and we are very well placed to play a major role in that," Jones said.

"But on timing, it's hard to say."

The Hong Kong bourse is extending the LME's offering into the city by adding mini-industrial metals futures that will start on Dec 1, Li said.

"It's not just about what the Chinese share of the LME is," Jones said, "it is also about creating new commodity liquidity pools in Hong Kong that everyone can play in. It's not just about getting more Chinese business on the LME, it is also about building Hong Kong as a commodities center."

London Metal Exchange to add RMB in new clearing system	China's Top 10 stock market milestones