Introduction
- Good morning, distinguished guests and welcome to the Singapore Iron Ore Forum.
- We are privileged to have with us today:
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- Guest-of-Honour Mr. Chee Hong Tat,
- Senior Minister of State for the Ministry of Trade and Industry and Ministry of Education, as well as our partners:
- Ms. Zhong Manying, Minister-Counsellor, Embassy of China;
- Mr. Satvinder Singh, Assistant Chief Executive Officer, Enterprise Singapore;
- Mr. Liu Zhonghui, Vice President, China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters (CCCMC);
- Mr. Wu Jingjing, Deputy General Director, China Iron and Steel Association (CISA).
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- Thank you for gracing this Forum, the highlight of our annual Singapore Iron Ore Week. With your participation and support, this event has grown in stature as one of the most important gatherings for the iron ore and steel industry.
Global Outlook
- Since our last Forum, we have witnessed a slow and uneven expansion of the world economy. The IMF is projecting GDP growth to moderate to 3.3% this year, down from 3.6% in 2018. A long-running trade war is continuing, while some of Emerging Asia’s biggest countries are in the middle of their general elections. Despite the uncertainties, there is still a sense of optimism.
- In the iron ore market, volatility – an important part of any trader’s reason to exist - has come roaring back not just because of the geopolitical and macro outlook, but also due to shocks on the supply side. Since the mining tragedy in Brazil at the end of January, prices have surged by over a third to a record high before pulling back on signs that, perhaps, demand may not keep pace.
- Are iron ore prices above US$100 a metric tonne sustainable? Will supply be the main theme driving the markets in the coming months? I look forward to hearing insights from our speakers and panellists today.
SGX’s Iron Ore Journey
- Steel forms the backbone of industrialisation and urbanisation. Indeed for us in Asia, iron ore has become the region’s first truly global commodity – increasingly following in the footsteps of the oil complex in terms of size and economic importance.
- It has been 10 years since SGX pioneered the world’s first iron ore swaps. Over the past decade, we have partnered with the industry – from miners to traders to interdealer brokers – to build a successful ecosystem, delivering tools that are shaping the way market participants invest and more importantly to manage risk.
- In recent times, we have read about how firms are pulling out of commodities. Yet, with China opening up its marketplaces for raw materials, this asset class remains firmly anchored in physical trade flows and is growing as a macroeconomic proxy.
- Physical and financial participants alike look to us as the global price reference. We clear almost the entire international market for iron ore and coking coal derivatives and offer an unmatched, round-the-clock risk-management service. The launch of high-grade iron ore derivatives last December – another world-first – is testament to our innovative spirit and market leadership.
- On the shipping side, through the Baltic Exchange, which joined the SGX family in 2016, we have strengthened risk management by bringing together cargo and freight. In the coming months, we will launch steel derivatives to complete the “Virtual Steel Mill,” driving capital efficiencies across the whole value chain.
- In the space of 10 years, Singapore – a country that is neither a producer nor consumer of iron ore – has punched above its weight and secured a vital position as the global hub for the commodity, both for price discovery and for risk management.
Note of Appreciation
- As always, we would like to express our deep appreciation to MTI, Enterprise Singapore, our co-organiser E-Steel, strategic partners, clearing members, clients as well as sponsors, for making this event possible. I wish everyone a rich and rewarding forum today. Thank you.
