July 8 (Bloomberg) -- The London Metal Exchange has entered discussions with Singapore Exchange Ltd. on the possibility of cooperation, the U.K. bourse said today, as it opened its first overseas office.

"It will open up many new opportunities for the LME as well as allowing us to maximize our existing significant trading footprint in Asian markets," Martin Abbott, chief executive of the LME, said today in a statement without elaborating. The exchange will also add another warehouse location in Asia by the end of the year, he said.

The 133-year-old metal's bourse, the worldwide price-setter for commodities like copper, is expanding into Asia as it seeks to attract greater interest from regional investors. Trading volumes on exchanges in China gained to the highest ever last year as new contracts were introduced and strong demand drove imports of copper, soybeans and iron ore to records.

"Most Asian trading is on the Select platform and represents about 5 percent of our volume," Liz Milan, managing director for LME Asia, said at a news briefing in Singapore, where the bourse's regional office is located. Select is the exchange's electronic trading system.

Magnus Bocker, CEO of Singapore Exchange, declined to say what the discussions were about, saying only it would "maximize their potential in a number of mutually beneficial areas."

Hedging and investing in LME contracts has increased in Asia because of their relevance to industrializing and emerging markets, the exchange said in a statement. The LME handled $7.41 trillion of contracts last year, including 49.7 million in aluminum, 26.5 million in copper and about 30,000 in Mediterranean steel billet.

The LME has warehouses in Singapore, South Korea, Malaysia and Dubai and "we are looking to grow that footprint," Milan said. The warehousing must be near a net consumption hub, Abbott said. "If Singapore goes fully containerized we have to find alternatives," Abbott said.