Speech by MOS Low Yen Ling at Singapore International Ferrous Week Opening Ceremony

Introduction

1.    I am very happy to welcome all of you to the Singapore International Ferrous Week, I understand that we have more than 1000 participants and that yesterday was day one. A very good morning to all of you, distinguished speakers, ladies and gentlemen. It is my great pleasure to be here with you at the opening ceremony of the Singapore International Ferrous Week (SIFW). This event showcases the strong partnership between the industry and Government, as well as Singapore’s position as a key trading hub for ferrous metals in Asia.

2.    Again, a big and warm welcome to all participants at this conference. I believe this being day two of the conference, stretching till Friday, I believe that you will gain many valuable insights over the next four days.

Singapore: a leading ferrous metal trading hub

3.    As one of the world’s largest trading hubs for energy, agri-commodities and metals, Singapore is also developing into an exciting global trading hub for ferrous metals. Allow me to update you on some of the developments on this front. The ferrous metal trade is a significant contributor to Singapore’s international trading hub status, making up about 15% of our total offshore trade in 2021. At the same time, offshore ferrous metals trade grew from US$116B in 2020 to US$147B in 2021.¹ Despite COVID, you can see the headroom for growth. Top global miners such as BHP² and Rio Tinto have based their global marketing hubs for iron ore in Singapore, while six out of the top ten global steel producers³ conduct their trading and regional operations here, managing the operations in Singapore and in some cases managing operations all over the world.

4.    adding to the vibrancy of our ferrous metal trading sector, SGX Group pioneered the world’s first iron ore swaps in 2009. In 2022, it cleared 3 billion metric tonnes of futures and options. Just to give us a sense of scale this represents almost twice the size of the underlying physical seaborne market. From its success in iron ore contracts, SGX Commodities has gone on to develop a suite of ‘virtual steel mill’ products, this will allow market participants to trade paper contracts for coking coal, steel rebar and freight on the SGX. Today, SGX is the leading venue globally for seaborne ex-China iron ore, coking coal and dry bulk freight derivatives. I share this because I know many of you are travelling from other parts of the world to Singapore and this might be your first visit since COVID. It is our job to update you on what are some of the exciting developments here, so that you can consider expanding your operations here in Singapore. This achievement is underpinned by Singapore’s position as a global commodities hub as well as our vibrant trading ecosystem. SGX’s price discovery and risk management offerings for the steel value chain also contributed to our success.

Singapore is committed to supporting its trading ecosystem

5.    These achievements are very significant for a small country like Singapore, which as you know does not have any natural resources. We depend heavily on trade, one of the critical pillars of Singapore’s economy, to fuel our growth. Many of you tell us the reason why you site your operations, deepen and expand your operations here is because a Singapore provides a stable legal and regulatory environment, a competent workforce, global connectivity, and ease of access to a full suite of financial services - all of which are attractive to traders, decision makers, movers and shakers like yourself.

6.    And you tell us that Singapore being a strong advocate for free trade and the need for countries to remain open and connected, Singapore’s wholesale trade today contributes to about one-sixth of our GDP and around 8% of our workforce, out of which almost 70% are PMET jobs. So on behalf of our Singapore Government, Ministry of Trade and Industry and various economic agencies, we would like to thank all of you for your trust and confidence in Singapore, for working with us to create good jobs in Singapore.

7.    Just a year ago, our Minister for Trade and Industry, Mr Gan Kim Yong announced the Singapore Trade 2030 strategy. It was launch in March in Parliament last year and through the Trade 2030 strategy, we aim to achieve two goals. Firstly, to grow the value of our exports from S$805 billion in 2020 to S$1 trillion by 2030. Two, to double our offshore trade from US$1 trillion to US$2 trillion over the same period. Despite the uncertainty in the external environment and the dampened economic outlook this year, I assure you that Singapore remains committed to growing the trading sector and ensuring our trading ecosystem stays competitive. 

8.    We will continue to diversify our trading partners to emerging regions such as Southeast Asia, Latin America, and Africa. Through targeted mission trips and commodity conferences supported by the Government, such as the SIFW, we will keep forging new connections with global players, decision makers like yourself that will boost our overall trade vibrancy.

9.    Having made good progress in developing Singapore into a regional carbon services and trading hub, we will also seek new opportunities in areas such as decarbonisation. Coming out of COVID, there are two emerging trends, first, digitalisation and second, sustainability. We all need to work together to decarbonise and transit to a low-carbon future. We now have the highest concentration of carbon service providers in Southeast Asia - an extensive network of 70 companies providing carbon services in areas such as low-carbon advisory and carbon trading exchanges. Companies in the ferrous metals trading sector, such as BHP and Rio Tinto, are also expanding their carbon trading operations in Singapore.

10. Our fast-growing carbon services industry and trading ecosystem place Singapore in a good position to help the ferrous trading sector decarbonise supply chains and attract low-carbon ferrous products to be traded out of Singapore.

11. The opportunities for decarbonising the ferrous industry are tremendous. This is what the conference plenary session will help us uncover, especially given the increased steel consumption in Southeast Asia.⁴ I encourage companies to develop strategies to tap into the rising demand for low-carbon or green steel and leverage Singapore’s strategic position as a key node to access growing demand in the region. Here allow me to cite examples:

a.    Green Esteel, a Singapore-headquartered company, owns a hot briquetted iron (HBI) plant in Malaysia powered by natural gas. A more environmentally-friendly intermediate steel product, HBI abandons the use of coking coal in the steelmaking process, which cuts carbon emissions by 50%. To further tap into sustainable growth opportunities, Green Esteel is developing a green steel industrial park in Malaysia that will use renewable energy such as hydro, solar and wind energy to power its operations. It also has plans to produce and use green hydrogen in its steelmaking process to produce green steel products.

b.    Another company, Mlion , is a fast-growing Singapore SME providing foundation solutions in waterfront and underground construction. Mlion has developed two innovative solutions to promote a circular economy and decarbonisation within the steel industry. The first is a B2B marketplace which connects buyers and sellers in pre-owned steel materials, thus allowing existing steel to be reused and reducing the need to produce new steel. The second solution increases the traceability and usage of pre-owned steel by providing a unique identity to the steel products.

12. I am sure that over the course of this conference, you will discover many companies embarking on bold and innovative initiatives to transform their operations to capture the rising waves of opportunities right here in Singapore, for the region and for the world.

Conclusion

13. In conclusion, I would like to thank SGX and partners. Conferences like SIFW play a vital role in forging collaboration and partnerships in the ferrous sector. As we continue to develop a vibrant ferrous trade in Singapore, I want to assure you that the Government, industry and research institutions will continue to  work hand in hand to shape effective policies and regulations, as well as foster research and development, and promote knowledge sharing, like what we are doing right here this week. We will keep striving to ensure that Singapore continues to be an important trading hub for the ferrous sector.

14. I wish everyone a very fruitful time and trust that you will gain fresh insights and valuable partnerships at this conference. Thank you.

¹ GTP Survey 2020 and 2021.

² BHP stands for Broken Hill Proprietary.

³ By production volume.

⁴ Steel consumption has been growing in SEA. From 2011 to 2021, ASEAN-6 steel consumption increased from 52.4 million metric tonnes to approximately 77 million metric tonnes in 2021, an increase of 47%. Source: Southeast Asia Iron and Steel Institute, 2022 https://www.oecd.org/industry/ind/Item_6.3_SEAISI.pdf