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1. Distinguished guests, ladies and gentlemen, good afternoon.
2. A very warm welcome to Singapore Iron Ore Forum, the anchor event of SIFW. This is the 9th year that SGX has been hosting this flagship event for the iron ore community.
3. Through the close collaboration by the organisers and industry, as well as active participation from key industry leaders, this forum has evolved to become the forum to discuss and debate the latest industry trends and market developments.
4. This is the first time in almost three years we are holding this event physically. To allow participants around the world to join us at this very important gathering for the industry, we have included a live streaming option as well. Thank you all for joining us physically and virtually!
5. I certainly look forward to the active conversations on the way forward for the iron ore and steel industry. As I see it, financialisation and sustainability continue to be two very important development for the steel value chain.
IRON ORE CONTINUES TO FINANCIALISE
6. With volumes surpassing two billion tonnes annually, equivalent to traded value of more than US$1 billion daily, SGX continues to be the global benchmark and leader in iron ore derivatives. Year-to-date, we recorded a 34% increase in total volumes year-on-year, with record volumes by physical traders.
7. At the same time, as iron ore continues to gain strong recognition as a macro proxy for global economic growth, the financial players in our market are growing. Today, more than 35% of SGX’s iron ore volumes originate from participants in the financial sector, including funds, proprietary trading groups (PTGs) and commodity trading advisors (CTAs), and it is a trend that we expect will continue.
8. With greater investment allocation into index-linked commodities product, more passive investments have started finding their way into iron ore. Recognising the economic significance and increasing liquidity of the Iron Ore 62% contract, Bloomberg’s Index Services is planning the release of a single commodity tracker later this year, as part of its established commodity index family, BCOM. The launch will provide investors an opportunity to adjust and adapt to an evolving global commodity landscape.
SUSTAINABILITY
9. Next, sustainability. While steel accounts for around 8% of global emissions, it is a key building block and the most important metal for the building of green infrastructure, including wind turbines and electric vehicles. Today’s forum will therefore serve as an important platform for us to share, and debate steel’s role in the global energy transition and the industry’s path towards net zero.
10. The good news is that major steel-producing countries, including China, Japan, the US and EU countries have set ambitious targets to reach net-zero. The steel industry is also undergoing a transition to reduce emissions through technology, change in raw materials and energy sources in not just the manufacturing process but also the shipping process.
11.Just looking at our volume numbers - SGX’s suite of 65% high-grade iron ore contracts saw robust demand since launch, with monthly traded volumes seeing consistent growth, a clear sign that our clients are increasing utilising the higher-grade iron ore in their steel production process as a way to reduce emissions.
12. Our low sulphur fuel oil contracts has also seen robust growth. In 2021, volumes grew 45% year-on-year, and in the first four months of this year, volumes more than tripled compared to the same period last year, as the use of this bunker fuel with lower emissions continue to grow.
13. We are building the green future together, and I certainly look forward to the exchange and all our ecosystem partners here playing a greater role in this transition.
14. Today’s iron ore forum is packed with a wide-range of topics on the industry, including the two trends I mentioned, as well as new mega trends such as the metaverse, new frontiers in the steel making industry and iron ore innovation.
15. On this note, I wish you all fruitful discussions in the coming days. Thank you.
