HKEx Q3 profit surges

Hong Kong Exchanges and Clearing Ltd (HKEx) posted a 81% increase in third-quarter profit attributable to shareholders, helped by increased market activity in cash and derivatives markets, income from LME Clear and the commercialisation of the LME’s trading fees.

Hong Kong Exchanges and Clearing Ltd (HKEx) posted a 81% increase in third-quarter profit attributable to shareholders, helped by increased market activity in cash and derivatives markets, income from LME Clear and the commercialisation of the LME’s trading fees.

For the third quarter ended September 30, the bourse posted a 67% increase in third quarter earnings before interest expenses and other finance costs, taxation, depreciation and amortisation (Ebitda) to HK$2.9 billion. Profit attributable to shareholders rose to HK$2.3 billion and revenue and other income rose 52% to HK$3.75 billion

HKEx said it recorded a one-off gain of HK$445 million in the third quarter related to the disposal of a leasehold property.

Profit attributable to shareholders in the nine months ended September 30 rose 75% to HK$6.43 billion, while Ebitda rose 66% to HK$8.14 billion.

Nine-month revenue rose 49% to HK$10.6 billion, exceeding the HK$10 billion mark for the first time in a financial year.

HKEx commodities segment
The commodities segment, which comprises the LME business and the London Metal Mini Futures listed on the HKEx, saw Ebitda in the nine months rise 71% to HK $937 million.

“Due to an unfavourable global macroeconomic environment and the overall depressed state of commodity prices, the average daily volume of metals contracts traded on the LME decreased by 3% during year-to-date third quarter 2015 against year-to-date third quarter 2014,” the bourse said.

But total futures market open interest at September-end rose 1% year-on-year.

Average daily volume of metal contracts in the nine months fell 3% to 681,550 lots due to weaker demand for industrial metals.

Average traded volumes of aluminium fell 9%, zinc down 6%, lead down 0.7%. Copper and nickel daily volumes rose 5% and 6%, respectively.

“During the third quarter of 2015, the LME continued to consult the market on proposed reforms to its physical delivery network in order to address the remaining queues and potential future queues, at LME warehouses,” HKEx said.

To encourage more over-the-counter business to be brought on-exchange, the LME has announced measures to grow options trading on the exchange, increase transparency of data reporting and provide greater protection for participants placing large options orders on the exchange, it added.

And in order to optimise the price-discovery process on the Ring, the LME has refined and enhanced its procedures for establishing the Closing Prices on the Ring, which allows Category 1 Members to efficiently process their orders by separating carry trading and three-month trading.

“A market making programme was introduced to boost existing third Wednesday contract liquidity on LMEselect in October 2015, and similar programmes will be introduced to support the launch of aluminium premium contracts and steel contracts on the LME in November 2015.”

HKEx will also be launching three London Metal Mini Futures contracts on the HKFE, subject to regulatory approval.

In October, the bourse also signed a Memorandum of Understanding to develop the “London-Hong Kong Connect”.

Shivani Singh
shivani.singh@metalbulletinasia.com
Twitter: @ShivaniSingh_MB

What to read next
The US aluminium industry is experiencing challenges related to tariffs, which have contributed to higher prices and premiums, raising questions about potential impacts on demand. Alcoa's CEO has noted that sustained high prices could affect the domestic market. While trade agreements might provide some relief, analysts expect premiums to remain elevated in the near term. However, aluminum demand is projected to grow over the long term, supported by the energy transition and clean energy projects. To meet this demand, the industry will need to increase production, restart idle smelters and address factors such as electricity costs and global competition.
Read Fastmarkets' monthly base metals market for May 2025 focusing on raw materials including copper, nickel aluminium, lead, zinc and tin.
The Mexico Metals Outlook 2025 conference explored challenges and opportunities in the steel, aluminum and scrap markets, focusing on tariffs, nearshoring, capacity growth and global trends.
China has launched a coordinated crackdown on the illegal export of strategic minerals under export control, such as antimony, gallium, germanium, tungsten and rare earths, the country’s Ministry of Commerce announced on Friday May 9.
Fastmarkets proposes to amend the frequency of Taiwan base metals prices from biweekly to monthly, and the delivery timing for the tin 99.99% ingot premium from two weeks to four weeks.
The US-China trade truce announced on May 12 has brought cautious optimism to China’s non-ferrous metals markets, signaling a possible shift in global trade. Starting May 14, the removal of additional tariffs has impacted sectors like battery raw materials, minor metals and base metals such as zinc and nickel, with mixed reactions. While the improved sentiment has lifted futures prices and trade activity, the long-term effects remain unclear due to challenges like supply-demand pressures and export controls.