Financial Secretary Paul Chan on Sunday said all eight warehouses that have been approved by the London Metal Exchange (LME) to store metals and issue trade documents are in operation.

The idea was first floated in the Chief Executive's Policy Address last year.

Writing on his official blog, Chan noted that work is now underway to create a “commodity trading ecosystem” in the SAR.

One of the most significant milestones, the financial chief added, is joining the LME's global warehouse network in January -- further connecting the country with the world’s most active metals trading market.

“The establishment of LME-approved warehouses in Hong Kong has improved the efficiency of non-ferrous metal allocation, reduced logistics time and cost, and ensure a stable supply of critical metal resources in the region,” he said.

“This highlights Hong Kong’s advantages as an international free port under the One Country, Two Systems principle, including zero-tariff, efficient and smooth customs clearance and globally accessible logistics network.”

In the longer term, Hong Kong will be in a better position to carry out commodity transactions settled in renminbi, he added.

Chan also said that as of early August, the SAR’s LME-approved warehouses have attracted 8,000 tons of metals stored in the form of warrants.

Warrants are title documents which allow ownership transfer without the metal physically moving out of the warehouse.

The minister pointed out that the government has established a task force to review issues related to gold and financial trade, with details to be announced within this year.