Singapore Exchange working to increase client base in Indian iron-ore, steel sector

PTI

Singapore, May 13

India is a key market for Singapore Exchange (SGX Group), which is working on expanding its client base among the stakeholders of the iron-ore and steel sector that is set to experience a strong demand growth, given the huge potential of infrastructure projects led by the Indian government's initiatives, it said on Friday.

"India is a key market for us and it is important because of the potential infrastructure projects," said SGX Group Head of Commodities Will Chin, the company which runs one of the most active iron-ore contracts in the global futures market.

"To us, it is an important client base, we want to work with the industry stakeholders, especially in the risk management of iron-ore trade," he said.

"As the second largest producer of crude steel with 118 million tonnes produced in 2021, India's need to participate and hedge in the seaborne market will continue to increase alongside its growth in iron-ore consumption.

"Today, Indian participants are well represented in the SGX iron-ore market from a wide spectrum of the industry, ranging from physical participants to proprietary financial traders," Chin said.

In 2021, volumes from Indian participants in the SGX iron-ore contract accounted for close to 21 million tonnes. "We expect this number to grow in the coming years," Chin told PTI.

Given the huge infrastructure demand across the globe, such as greenfield projects while others are undergoing redevelopments, global steel demand is going to surge in the coming years.

This will drive iron-ore demand, already facing disruption in supply through geopolitical issues, including the Russia-Ukraine conflict, cancellation of iron-ore exploitation by Guinea and India's decision to impose 30 per cent export duty on grade above 58 per cent FE ore.

"For India, the super cycle has just begun and will remain for the next five years," said a source at a major mineral trading house.

The Indian government is pursuing a trillion-dollar programme for implementing projects.