Global steel demand slows, but Asian demand still supports the ferrous metals industry
Expectations for global steel demand growth have been cut sharply this year, putting short-term pressure on the ferrous metals industry. However, demand in Asian markets remains resilient and will provide medium- to long-term support, while Singapore is also expected to continue strengthening its position as a ferrous metals trading hub.
Tan See Leng, Senior Minister of State at the Ministry of Trade and Industry and the Ministry of National Development, said at the opening ceremony of Singapore International Ferrous Week on Tuesday (June 16) that global steel demand growth for 2026 has been cut from about 1.3% at the start of the year to 0.3% now, but the industry is expected to recover to about 2.2% growth in 2027.
Tan said the short-term pressures facing the industry mainly come from three areas: supply chains, costs and trade policy. Conflict in the Middle East has disrupted supplies of raw materials such as direct reduced iron (DRI) and hot-briquetted iron; at the same time, rising energy and freight costs have further burdened companies; trade policy and tariff changes continue to affect global steel trade flows.
Even so, Asian demand remains a key force supporting the outlook. In Southeast Asia, urbanization, population growth and large-scale infrastructure development are driving long-term demand in steel-intensive sectors such as construction and manufacturing.
Notably, India is also becoming a major growth market, with steel demand expected to rise about 7% in 2026 and grow even faster in 2027.
Singapore strengthens its role as a ferrous metals trading and hedging hub
Tan said Singapore is now one of the world's major ferrous metals trading hubs, home to more than 60 mining companies, global traders and other key players across the value chain. Ferrous metals mainly refer to iron- and steel-containing metals, with common categories including iron ore, steel, pig iron, scrap steel and ferroalloys.
In addition, 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 when markets are volatile.
He stressed that Singapore has trading talent, shipping connectivity, trade finance and a rules-based legal system. These conditions allow companies to execute contracts, manage risk and adjust trade routes more flexibly when supply chains are disrupted.
Green metals forum debuts
This year, Singapore International Ferrous Week added the Singapore New Energy Metals and Materials Forum for the first time. The forum is co-organized by Green Esteel, a Singapore steel company focused on green and low-carbon development, and Shanghai Metals Market.
Tan said the forum will bring together global industry players to exchange views on trends in emerging materials and build strategic partnerships.
Tan also noted that technology adoption and the low-carbon transition will be key areas for upgrading the ferrous metals industry. Under Singapore's National AI Strategy 2.0, the country is investing in computing power, talent and industry applications, and has already set up more than 50 AI centers of excellence with industry partners.
He gave an example: global mining group Rio Tinto is working with AI Singapore to develop AI tools that improve freight invoice processing and shorten transaction processing times 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 testing of low-carbon alternative fuels.
