LONDON: The London Metal Exchange last week approved the listing of two new storage units in Port Klang, confirming the Malyasian port's rapid emergence as a major LME warehousing hub.
The LME storage wars, which were once fought out at Detroit and then the Dutch port of Vlissingen, have simply moved to a new setting.There are now 115 LME-registered sheds in Port Klang, up from just 42 two years ago. Only Rotterdam has more listed units and that's largely down to Dutch logistics operator C. Steinweg's historical footprint in the city.
The first LME warehouses in Malaysia opened at Johor in the mid-2000s as warehouse operators sought a cheaper alternative to Singapore. However, limited container capacity and competition from other freight pushed LME logistics companies to Port Klang, which had plenty of space next to a newly-established but under-used free zone, according to one LME warehousing veteran.The location also has one other key advantage for warehouse operators.
The same four companies bestride the entire LME warehousing landscape, storing 85 per cent of registered stocks at the end of July.Access, part of trading powerhouse Glencore, was the"owner" of the Vlissingen load-out queue, which at one stage in 2014 stretched out to an astonishing 748 days. A mandate for faster load-out of metal prevents queues becoming self-generating or what the LME calls"structural".
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