By Eric Onstad

LONDON (Reuters) -The London Metal Exchange's new warehouses in Hong Kong are seeing strong interest for metal deliveries before they go live next month, partly due to the current tightness in the copper market, the CEO of the exchange said on Wednesday.

Last month, the LME approved three more warehouses in Hong Kong, taking the total to seven, as it increases its presence in the city that is the gateway to the world's biggest metals consumer, China.

Hong Kong's higher costs have raised questions about the viability of the new storage facilities compared with other sites in Asia like Korea or Malaysia.

"They can put metal into the warehouses, but it won't show up on our numbers yet because the location isn't live until the 15th (of July)," LME Chief Executive Matthew Chamberlain told Reuters on the sidelines of the International Derivatives Expo.

"My understanding is there is quite a lot of interest in getting some metal in there before then."

Getting approval for warehouses in China to store LME-traded metal has been a strategic goal since Hong Kong Exchanges and Clearing bought the LME in 2012.

The exchange, the world's oldest and largest market for industrial metals, would still like to open registered warehouses in mainland China, but that would depend on approval by the Chinese authorities, Chamberlain said.

"But ultimately it's for mainland policymakers to decide whether or not they want LME warehouses."

However, in Hong Kong there was a good spread of locations to service various types of customers, including several near the northern border with Shenzhen and the mainland, he said.

"They'll be able to service Chinese metal owners who, for example, want to put copper into a warehouse, truck it down just over the border into the new territories, put it into a warehouse," Chamberlain said.

"That's obviously extremely relevant right now with the copper tightness... It will allow people to deliver into those backwardations more effectively."

Falling stocks in LME-registered warehouses have created a backwardation, or premium for nearby contracts against those with longer maturities .

Copper stocks in LME registered warehouses at 107,350 tons have dropped 60% since March and are at their lowest since May 2024.

(Reporting by Eric Onstad. Editing by Jane Merriman)