The announcement of the LMEShield initiative arrives off the
back of a number of other Asia focused developments for the LME.
The LMEShield initiative takes the LME yet one step further towards
its desire of having LME approved warehouses in Asia. However,
questions must be asked about whether the LMEShield initiative is
just a stop-gap measure into China or is it a diversification of
the core LME business into non-LME metals?
Introduction When Hong Kong Exchanges and
Clearing (HKEx) acquired the LME for £1.39
billion in 2012, market commentators had observed that, based on a
multiple of its earnings in 2011, at that price "it would take
180 years for HKEx to recoup its investment"1. It
was clear that HKEx felt it could justify that price based on its
confidence in opening up China to the LME. Of course, HKEx had a
more ambitious time horizon to recover its investment in the LME
and therefore set into play a series of steps to increase the
potential revenue streams
