Steel Demand Slowdown and Asian Support: Alvin Tan on Singapore's Hub Role
Global steel demand growth expectations have been cut significantly this year, putting short-term pressure on the ferrous industry. However, Asian market demand remains resilient, providing medium- to long-term support, and Singapore is well-positioned to consolidate its role as a ferrous trading hub.
Minister of State for Trade and Industry and National Development Alvin Tan noted at the opening of Singapore International Ferrous Week on Tuesday (June 16) that the global steel demand growth forecast for 2026 has been lowered from about 1.3% at the start of the year to 0.3% currently, with the industry expecting a recovery to about 2.2% growth in 2027.
Tan said short-term pressures on the industry come mainly from three areas: supply chains, costs, and trade policy. The Middle East conflict has disrupted supplies of raw materials such as Direct Reduced Iron (DRI) and Hot Briquetted Iron; rising energy and shipping costs have further burdened companies; and changes in trade policy and tariffs also continue to affect global steel trade flows.
Despite this, Asian demand remains a key pillar supporting the industry outlook. Southeast Asia, driven by urbanization, population growth, and large-scale infrastructure development, still has long-term demand in steel-intensive sectors like construction and manufacturing.
Tan also mentioned that India is emerging as a major growth market, with steel demand expected to grow about 7% in 2026, with the pace potentially accelerating further in 2027.
Singapore Consolidates Ferrous Trading and Risk Hedging Hub
Tan noted that Singapore is one of the world's major ferrous trading hubs, hosting over 60 key companies across the value chain, including miners and global traders. Ferrous metals primarily refer to iron and steel, with common categories including iron ore, steel, pig iron, scrap, and ferroalloys.
In addition, the Singapore Exchange (SGX) is the largest seaborne iron ore derivatives exchange outside China. Trading volumes far exceed physical market volumes, helping companies hedge risks in real time during market volatility.
He emphasized that Singapore has trading talent, shipping connectivity, trade finance, and a rules-based legal system. These conditions allow companies to execute contracts, manage risks, and adjust trade routes more flexibly when supply chains are disrupted.
Green Metals Forum Debuts
Singapore International Ferrous Week this year features the inaugural Singapore New Energy Metals and Materials Forum, co-organized by Green Esteel, a steel company focused on green and low-carbon development, and Shanghai Metals Market.
Tan said the forum will bring together global players to discuss trends in emerging materials and build strategic partnerships.
He also noted that technology adoption and low-carbon transition will be key areas for upgrading the ferrous industry. Under its National AI Strategy 2.0, Singapore is investing in computing power, talent, and industry applications, and has established over 50 AI Centers of Excellence with industry partners.
Tan cited an example: mining giant Rio Tinto is working with AI Singapore to develop AI tools to improve freight invoice processing and shorten transaction processing times for thousands of shipments.
On decarbonization, Tan said Singapore, as a global maritime hub and the location of the Global Centre for Maritime Decarbonisation, will continue to advance green shipping corridors and test low-carbon alternative fuels.
