Exchange operator CME Group Inc has held talks with Hong Kong authorities to add it to its aluminum contracts physical delivery network, according to people familiar with the matter.

The talks come after the London Metal Exchange — a rival in providing benchmark futures contracts for metals — last month received approval from Hong Kong to set up warehousing space.

ALSO READ: Chan: HK's unparalleled advantages a boon for global metal industry

A spokesperson for the CME declined to comment.

Exchange warehouse networks, where sellers can deliver metal and buyers can receive it by holding futures contracts through to expiry, have been at the center of some of the market’s biggest trades in recent years.

READ MORE: Chinese mainland will keep LME’s HKSAR warehouses full, operator says

A move into the Hong Kong Special Administrative Region would provide traders better ability to arbitrage fluctuating price differences between Chinese mainland and international prices for aluminum.

In addition, CME rules allow for open air warehousing, which could potentially reduce some costs.