SHANGHAI—Shanghai may gain the right to store commodities traded on the London Metal Exchange (LME) in six to eight months, allowing China to bypass ports in Singapore and South Korea, an official from the city’s largest duty-free zone said.

“We submitted an application this morning,” Hu Mingming, marketing director at Shanghai Waigaoqiao Logistics Center Co., said by phone last week from London, where he met exchange officials. “We hope to get this approved in six to eight months.”

The request is the latest from Shanghai, which is competing with rivals including Tianjin to become the first port city in China to be allowed to warehouse LME metals. The country now relies on storage at ports that already have approval including Busan and Incheon in South Korea, and Singapore. China is the world’s biggest consumer of metals such as copper and aluminum.

“Opening an LME warehouse will improve the transparency of trade flows and inventory levels in China,” Sheng Weimin, an analyst at Maike Futures Co., said by phone from Shanghai last week.

The LME has more than 30 approved locations in the US, Europe, Middle East and Asia that can take delivery of metals traded on the exchange, according to its web site. The sites must be in free-trade zones where shipments avoid local taxes. Incheon in South Korea gained approval in July.

LME spokesman Adam Robinson declined to comment on the Waigaoqiao application. South Korea took about two years to gain approval, he said, adding that the processing of applications from ports in Shanghai is into its second year.

“Shanghai is far ahead of other cities and will definitely be the first Chinese city to get the approval,” Hu said. “After that, warehouses will extend to Tianjin and elsewhere.”

China will store copper and aluminum initially, he said, adding that the LME had asked Waigaoqiao to consider warehousing steel and other products.

“LME warehouses in South Korea and Singapore are set to lose business as more deliveries will be made to the Chinese,” Cai Jinrong, an analyst at metals trader Wanxiang Resources Co., said by phone from Shanghai last week. ---Bloomberg

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SHANGHAI—Shanghai may gain the right to store commodities traded on the London Metal Exchange (LME) in six to eight months, allowing China to bypass ports in Singapore and South Korea, an official from the city’s largest duty-free zone said.

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