Speech by MOS Low Yen Ling at the Singapore International Ferrous Week 2024

Speech by MOS Low Yen Ling at the Singapore International Ferrous Week 2024

Your Excellencies


Distinguished Guests


Ladies and Gentlemen


Good Evening


Welcome Remarks


1. I am pleased to join you at the fourth edition of the Singapore International Ferrous Week (SIFW).


2. This year’s SIFW features four specialised forums focusing on green steel, iron ore, coking coal and Singapore shipowners. With 1,300 participants from estimated 18 countries, it provides a valuable platform for networking and exchanging views on trends and opportunities shaping the future of the ferrous industry. The strong turnout is a testament to the SIFW’s growth into a significant international event.


Steeling Against Headwinds


3. In the last few years, the ferrous industry enjoyed a boom driven by increased demand for commodities to support post-COVID economic recovery. However, looking ahead, the industry must brace itself for several headwinds.


a. Firstly, weaker macroeconomic conditions, especially the slowdown in China’s construction sector, could affect demand. Coupled with fluctuations in energy prices for electricity and natural gas due to ongoing geopolitical developments, this will inevitably create significant uncertainty for the industry.


b. Secondly, the industry is facing growing pressures from policies and regulations aimed at reducing carbon emissions. Many countries have implemented carbon policies to meet their emission reduction targets. This will require reducing the carbon footprint of steel production and its supply chain. For example, the European Union’s (EU) Cross Border Adjustment Mechanism (CBAM) entered its transitional phase in 2023. When fully implemented in 2026, the CBAM could result in higher carbon tariffs on steel imports into the EU. This would increase costs for exporters and reduce their competitiveness.


c. Thirdly, protectionist policies will also impact the industry. Top exporters of scrap metals, such as Malaysia and Japan, are imposing export barriers on these materials to prioritise their domestic markets. As a result, transitioning to newer and lower-carbon steel production methods that rely on recycling scrap metals will become more costly due to the scarcity and higher costs of steel scrap materials.


Opportunities Despite Uncertainties


4. Despite these challenges, Asia remains and will continue to be a bright spot for the sector in the years ahead.


a. Asia’s crude steel production has grown by about 10% over the past decade, accounting for nearly three-quarters of the world’s steel production.


b. Asia is also the largest consumer of finished steel products, accounting for about 70% of the world’s total consumption.


c. Southeast Asia is poised to boost its steelmaking capacity by almost 25% within the next three years, adding 20.5 million tonnes to its 80.4 million tonnes capacity in 2022. This will create new demand for iron ore imports, cementing Southeast Asia’s status as a key producer of exported steel.


5. Within the region, Singapore is well-placed to play a pivotal role in tapping into opportunities arising from the rising demand for steel.


a. Firstly, our strategic location at the crossroads of major sea routes makes us geographically ideal for distributing and trading ferrous materials to various parts of Asia.


b. Additionally, we have an efficient logistics sector that is well equipped to support the handling and transportation of ferrous materials.


c. Furthermore, we have established ourselves as a leading global commodity trading hub.


i. Today, the world’s key iron ore and steel players operate out of Singapore. Three of the top five global iron ore producers, commanding nearly two-thirds of global market share 5, are here. Seven of the top 10 global steelmakers —for example, China’s Baowu Group (ranked 1st) and Europe’s ArcelorMittal (ranked 2nd) — carry out significant global operations from our city-state.


ii. Singapore’s SGX Commodities has captured nearly 100% market share in the international seaborne iron ore derivative market. Since launching the world’s first iron ore swap in 2009, SGX Commodities has grown significantly, clearing 4.4 billion metric tonnes in iron ore derivatives last year. That is roughly three times the size of the underlying physical seaborne market.


iii. In addition, SGX operates the largest clearing venue for dry bulk freight globally. Following its acquisition of the Baltic Exchange in 2016, SGX has captured 70% of the global market share for dry bulk forward freight agreement contracts.


6. I am encouraged by the sector's progress on multiple fronts, including developing local trade capabilities.


a. We have companies coming onstream as sponsors of the Singapore-Industry Scholarship. For example, ITG Resources, a trading company, is one of the organisations joining these efforts to develop our local talent pool under the International Trade track.


7. Looking ahead, we aim to strengthen our position as an adaptable, innovation-driven, resilient ferrous metals trading and derivatives hub.


a. Over the past year alone, 15 companies have chosen to establish or expand their iron ore and steel activities in Singapore. International companies in the ferrous industry are increasing their presence and activities in Singapore, demonstrating their commitment and confidence in our hub.


i. For example, Tata Steel partnered with EnterpriseSG to co-develop and pilot solutions for sustainability-related challenges. Doing this through the Sustainability Open Innovation Challenge (SOIC), an annual platform organised by EnterpriseSG, Tata Steel aims to find innovative heat recovery solutions for their steel manufacturing facilities.


8. This collaboration with Tata Steel shows how the industry can invest in research and innovation to drive progress towards greater sustainability. Let me provide a few other examples.


a. The steel production industry has invested in Electric Arc Furnace (EAF) steel plants, which offer a cleaner and more efficient method for producing lower-carbon steel products. Demand for products such as steel scrap or hot briquetted iron is expected to increase as new EAF plants are built to replace older, less efficient steel mills.


b. Continental Steel, a Singapore-based steel supplier, became the first in Asia to supply XCarb®, a high-strength structural steel beam produced by the world’s leading steel producer, ArcelorMittal, using EAF. Made from recycled steel scrap and powered by 100% renewable energy sources such as wind and solar power, XCarb® achieves remarkably low CO2 emissions per ton of steel produced.


c. Another Singapore company, Natsteel, our only steel mill, is working together with the Singapore Institute of Technology (SIT) and Woh Hup, on a circular economy project to recycle the steel slag generated from the EAF steelmaking process. The aim is to use steel slag as an ecological or green concrete component. This green concrete can be used for coastal protection and flood management infrastructure if successful.


9. Singapore has established a strong carbon services and trading ecosystem to support ferrous industry players in their transition towards decarbonisation.


a. To maintain our competitive edge in the green economy, we are strengthening our carbon services and trading hub ecosystem. Over 120 carbon services firms are currently based in Singapore, the highest concentration of such providers in Southeast Asia.


10. Despite the challenges ahead, there are plenty of opportunities in the ferrous industry. Singapore remains committed to growing the ferrous trading sector as part of our Trade 2030 Strategy goals. We will reinforce our value proposition in trading and logistics while supporting companies in Singapore in reducing their carbon footprint.




11. I encourage all industry players here to leverage SIFW to network with and connect with your international and Singaporean counterparts. I trust you will find fresh opportunities for collaboration to grow your business and activities in Singapore’s vibrant, growing and dynamic ferrous metal ecosystem.


12. I wish all of you an enriching and successful SIFW 2024! Thank you.

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