Chinese brokerages push for LME membership to expand global metals role

Three Chinese brokerages – Yongan Futures, Orient Futures and ​Guotai Junan Futures – are preparing to apply for membership of the London Metal Exchange, sources familiar with the ‌matter said, in a move that would boost China’s presence on the world’s biggest marketplace for industrial metals.

The push reflects efforts by Chinese firms to capture a larger share of revenue from metals derivatives trading and further the brokers’ ambitions for global expansion.

Only six of the exchange’s more than 40 ​clearing members – firms that clear and settle trades – are Chinese, leaving the world’s top metals consumer under-represented.

Guotai Junan ​Futures is already in the process of applying for LME membership, one source said.

Orient Futures ⁠also has plans, though the timeline is unclear, two sources said.

Hangzhou-based Yongan is preparing its own application after setting ​up a UK entity last year, according to four sources who declined to be named as the plan is not ​public.

The three brokers are major players on China’s main metals bourse, the Shanghai Futures Exchange, and have established subsidiaries in Singapore over the past decade.

Leveraging London’s advantages

Yongan, whose British arm is known as Yongan International Financial (UK), recently hired Zhang Wei to head up the operation and guide the ​brokerage through the LME approval process, the sources said. Company registration documents show Zhang was appointed as director in April.

Zhang ​previously worked for an existing Chinese LME member, GF Financial Markets, in London, as well as for China Merchants Securities, which resigned its ‌LME ⁠membership in early 2021 after six years.

Zhang was not reachable for comment, while Yongan did not respond to a request for comment.

Orient Futures and Guotai Junan did not respond to requests for comment.

On an interactive investor platform this month, Yongan said it was applying for a regulatory licence from Britain’s Financial Conduct Authority and establishing a “solid foundation for legal and compliant operations in the ​UK and European markets”.

Two ​sources said the licence ⁠would be a precursor to an LME membership application, though Yongan did not mention the exchange.

“In the future, leveraging the advantages of London as an international financial centre and collaborating with ​resources in Hong Kong and Singapore, we aim to become a leading cross-border integrated financial ​services provider,” it ⁠said.

The LME, owned by Hong Kong Exchanges and Clearing, posted record futures trading volumes of 183.3 million contracts last year, up 7.7% from 2024. But these were mostly routed through non-Chinese clearing members which make money on every trade.

CLSA UK, owned by China’s ⁠CITIC Securities, ​was approved as an LME member last month and will begin trading on ​Monday.

“As the world’s largest industrial metals producer and consumer, China is fundamental to the global metals market and represents significant activity in the LME market,” an ​LME spokesperson said, declining to comment on applications.

(By Tom Daly and Pratima Desai; Editing by Veronica Brown and Elaine Hardcastle)