Global Steel Demand Slows, Asian Demand Resilience Supports Industry
Global steel demand growth forecasts have been sharply downgraded this year, putting pressure on the ferrous metals industry in the short term. However, Asian market demand remains resilient, providing medium- and long-term support for the industry, and Singapore is expected to consolidate its position as a ferrous metals trading hub.
Mr. Tan See Leng, Minister of State for Trade and Industry and National Development, said at the opening ceremony of the Singapore International Ferrous Week on Tuesday (June 16) that the global steel demand growth forecast for 2026 has been cut from about 1.3% at the start of the year to 0.3%, but the industry expects a recovery to about 2.2% growth in 2027.
Tan noted that the current short-term pressures facing the industry come from three areas: supply chains, costs, and trade policies. The Middle East conflict has disrupted supplies of raw materials such as Direct Reduced Iron (DRI) and hot briquetted iron. Meanwhile, rising energy and freight costs are adding to the burden on companies; changes in trade policies and tariffs continue to affect global steel trade flows.
Nevertheless, Asian demand remains a key force supporting the industry's outlook. Southeast Asia, driven by urbanization, population growth, and large-scale infrastructure construction, still has long-term demand in steel-intensive sectors such as construction and manufacturing.
Notably, India is also emerging as a major growth market, with steel demand expected to grow about 7% in 2026 and the pace could accelerate further in 2027.
Singapore Consolidates Position as Ferrous Metals Trading and Hedging Hub
Tan noted that Singapore is currently one of the world's major ferrous metals trading hubs, hosting more than 60 major companies across the value chain, including miners and global traders. Ferrous metals mainly refer to iron and steel containing metals, common products include iron ore, steel, pig iron, scrap and ferroalloys.
Additionally, the Singapore Exchange is the largest seaborne iron ore derivatives exchange outside China, with trading volumes far exceeding the physical market, helping companies hedge risks in real time amid market volatility.
He stressed that Singapore has trading talent, shipping connections, trade financing, 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
This year's Singapore International Ferrous Week added the inaugural Singapore New Energy Metals and Materials Forum. The forum is co-organized by Green Esteel, a Singapore-based steel company focused on green and low-carbon development, and Shanghai Metals Market.
Tan said the forum will bring together global players to exchange views on emerging materials trends and build strategic partnerships.
Tan also noted that technology applications and low-carbon transformation will be key priorities for upgrading the ferrous metals industry. Under its National AI Strategy 2.0, Singapore is investing in computing power, talent, and industrial applications, and has established over 50 AI Centres of Excellence with industry partners.
He cited the example of global mining group Rio Tinto, which is collaborating with AI Singapore to develop applied AI tools to improve freight invoice processing and reduce transaction processing time for thousands of shipments.
On decarbonization, Tan said Singapore, as a global maritime hub and home to the Global Centre for Maritime Decarbonisation, will continue to promote green shipping corridors and low-carbon alternative fuel trials.
