* LMEWeek Asia begins in Hong Kong
* HKEX to unveil new details on Qianhai spot trading
* Gold, LME liquidity roadmap will also be in focus
By Melanie Burton
HONG KONG, May 8 Exchange operator Hong Kong
Exchanges and Clearing is set to unveil its Qianhai
commodity trading platform this week in a landmark move that it
hopes will firmly establish its presence in mainland China.
As the metals industry meets for LMEWeek Asia in the Chinese
territory, the focus will be on the Hong Kong bourse's latest
attempt to take on China's home-grown exchanges in Shanghai,
Dalian and Shenzhen.
The owner of the London Metal Exchange (LME) will host a
visit on Thursday to its spot-trading platform in Qianhai, just
50 kms (30 miles) from Hong Kong, where it hopes to replicate
the LME's success.
The aim is to connect Qianhai with the LME, luring customers
with opportunities to be active in both the mainland's domestic
markets and international markets.
For years the Hong Kong bourse has tried to build up a
mainland business, banking on its location as the perfect
meeting point for China's mainland and global commodities
traders, a strategy it bankrolled with a $2.2 billion buyout of
the London bourse back in 2012.
But China's regulators have shown less enthusiasm, concerned
that taking in a foreign bourse too early could derail the
development of its own commodity bourses and influence pricing.
HKEX CEO Charles Li is hoping the Qianhai platform will
attract an industrial base to use its commodity contracts, which
will be backed by warehousing and logistics chains with a view
to create prices that reflect the physical market.
The LME has set up a new warehousing certification system to
track metal and cut fraud, after several financing scandals
rocked the industry in recent years. LMEShield will have a
one-year pilot programme in China.
But industry insiders are skeptical that the exchange will
offer them something that they don't already have in a market
where investors are turning away from commodities in favour of
more tailored investment products.
"They have to define what makes it relevant," said John
Browning, managing director of Hong Kong-based broker BANDS
Financial. "If there is a vacuum that this exchange is going to
fill, why hasn't it been filled before?"
LMEWeek Asia will also mark Matthew Chamberlain's debut as
LME CEO, after he took the top job last month, when he also set
down a roadmap to reverse the LME's falling liquidity.
The week is also expected to have a focus on gold. The LME
will launch two separate London and Hong Kong gold contracts
over June and July to coincide with the 20th anniversary of the
British handover of Hong Kong back to China, Li said earlier
(Reporting by Melanie Burton; Editing by Richard Pullin)