Asian Commodities: Alvin Tan Discusses Global Steel Demand Slowdown and Singapore's Trading Hub

Global steel demand growth expectations have been significantly downgraded this year, putting short-term pressure on the ferrous metals industry. However, Asian market demand remains resilient, providing medium- to long-term support for the industry, and Singapore is expected to continue consolidating its position as a ferrous metals trading hub.

Minister of State for Trade and Industry and National Development Alvin Tan stated at the opening ceremony of Singapore International Ferrous Week that the global steel demand growth forecast for 2026 has been lowered from about 1.3% at the beginning of the year to the current 0.3%, but the industry expects it to rebound to about 2.2% growth in 2027.

Alvin Tan pointed out that the short-term pressure facing the industry mainly comes from three aspects: supply chains, costs, and trade policies. The Middle East conflict disrupts the supply of raw materials such as Direct Reduced Iron (DRI) and hot briquetted iron, while rising energy and freight costs further burden enterprises; changes in trade policies and tariffs also continue to affect global steel trade flows.

Nevertheless, Asian demand remains a key force supporting the industry's outlook. Driven by urbanization, population growth, and large-scale infrastructure construction in Southeast Asia, steel-consuming sectors such as construction and manufacturing still have long-term demand.

He also mentioned that India is becoming a major growth market, with steel demand expected to grow by about 7% in 2026, and the growth rate is expected to further increase in 2027.

Singapore Strengthens Its Position as a Ferrous Metals Trading and Hedging Hub

Alvin Tan said that Singapore is currently one of the world's major ferrous metals trading hubs, gathering over 60 mining companies, global traders, and other key players in the value chain. Ferrous metals mainly refer to iron-containing metals such as iron and steel, with common categories including iron ore, steel products, pig iron, scrap steel, and ferroalloys.

In addition, the Singapore Exchange is the largest seaborne iron ore derivatives exchange outside China, with trading volumes far exceeding the physical market, helping enterprises hedge risks in real time during market volatility.

He emphasized that Singapore has trading talent, shipping connectivity, trade financing, and a rules-based legal system. These conditions allow enterprises to execute contracts, manage risks, and adjust trade routes more flexibly when supply chains are disrupted.

Green Metals Forum Debuts: Low-Carbon Transition and Technology Application

This year, Singapore International Ferrous Week has added the Singapore New Energy Metals and Materials Forum for the first time. The forum is co-organized by Green Esteel, a Singapore-based steel enterprise focusing on green and low-carbon development, and Shanghai Metals Market.

Alvin Tan said the forum will bring together global industry players to exchange views on emerging material trends and establish strategic partnerships.

He pointed out that technology application and low-carbon transition will be the focus of the ferrous metals industry's upgrade. Under the National AI Strategy 2.0, Singapore is investing in computing power, talent, and industrial applications, and has established over 50 AI Centers of Excellence with industry partners.

As an example, global mining group Rio Tinto has partnered with AI Singapore to develop an AI tool to improve freight invoice processing and shorten transaction processing time for thousands of shipments.

On decarbonization, Alvin Tan said that as a global maritime hub and the location of the Global Centre for Maritime Decarbonisation, Singapore will continue to promote green shipping corridors and low-carbon alternative fuel testing.