Singapore-Asian-Trading-Hub

Your Global Trading Hub

Asia is expected to account for about 60% of the average annual growth in global trade until 2020, and Singapore is right in the thick of the action. Apart from being strategically located in the middle of key trade flows from around the world, Singapore’s convenient time zone also allows traders to complete the 24-hour trading cycle.

In addition, Singapore is known for its political neutrality and stability, and is acknowledged as the economy most open to and conducive for trading.

Key Commodity Clusters

Singapore is the Asian home to the top global commodities players across the three key clusters.

Metals-&-Minerals

Metals & Minerals

Key hub for base metals, iron ore and coal

Singapore serves as a business hub for natural resource companies due to its proximity to both demand and supply regions (for example, coal and iron ore from Southeast Asia and Australia are sold to China and India), and the availability of a spectrum of financial and logistics services. 

Given the uncertainty in commodity prices, players can manage their risks by hedging their positions with commodity derivatives such as iron ore swaps through the Singapore Exchange.  

This has led commodity players from around the world to set up their bases in Singapore. The concentration of players along the value chain, from the large integrated miners to the independent brokers and traders, has made Singapore a marketplace for this sector. 

 

Precious Metals

As the world’s principal wealth and private banking hub and one of the top four financial centres, Singapore is well-poised to be a neutral precious metals trade hub in Asia.

 

Agri-Commodities

Agri-Commodities

Global trading hub for natural rubber; Asia Pacific hub for grains, palm oil and sugar

Thanks to its strategic location, easy access to financing and availability of trading talent, Singapore has captured a 20% share of global agri-commodities trade[1].

The agri-commodities cluster in Singapore is represented by companies from the US, Europe, emerging Asia, Latin America and Russia. Singapore is positioned strategically among the major consuming markets for agri-commodities like China and India, as well as in the main origination markets for palm and rubber in Southeast Asia.

A significant cluster of natural and synthetic rubber traders, as well as the world's largest tire makers have set up bases in Singapore, making it the world's largest rubber trading hub. Additionally, SGX's rubber contract is the reference pricing for much of the world's physical contract.

Singapore has also attracted many global grain and palm oil players. Niche commodities such as sugar, cocoa, coffee and fertiliser are well-represented by global trading houses.

Singapore has thus proven to be an ideal location for agri-commodity companies, where regional players such as Noble, Wilmar and Olam have been listed. A number of agri-commodity companies have also raised financing through bond issuance through the local market.


[1] Geneva Trading and Shipping Association for oil and agriculture

 


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Energy & Chemicals

Largest oil trading hub and pricing centre in Asia

Singapore is Asia’s leading oil pricing and trading hub[1], with more than 400[2] companies trading in petroleum and petroleum products. The presence of about 10 million cubic metres of independent storage capacity also plays an important role in supporting this hub. 

Today, Singapore is the number one bunkering hub in the world and among the top five in export refining capacity[3].

Ranked as one of the top ten hubs for petrochemicals in the world[4], Singapore is used by many of the top petrochemical companies to conduct marketing and sales, research and development, and as a regional logistics hub for the Asia-Pacific.

Singapore is also emerging as Asia’s liquefied natural gas (LNG) hub. Besides the Singapore LNG Terminal which began commercial operations in 2013, Singapore has a strong community of companies with LNG trading or marketing desks in the country. Key global players have also expanded their LNG desks with activities ranging from trading and marketing to origination, operations and risk management functions.



[1] IE Singapore
[2] Singapore Department of Statistics
[3] Statistical Review of World Energy, BP, 2008
[4] Special Report on Singapore Part 2, Global Business Reports, 2010

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