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SGX Group to focus on risk-hedging products related to Indian infra, ESG initiatives

Risk hedging products related to the Indian infrastructure development, green initiatives, ESG as well as new energy minerals and metals are some of the areas SGX Group wants to focus on.

SGX Group to focus on risk-hedging products related to Indian infra, ESG initiatives

Tuesday May 16, 2023 , 3 min Read

The Singapore Exchange (SGX Group) plans to focus on risk-hedging products related to Indian infrastructure development as well as Environmental, Social and Governance (ESG) initiatives, as it aims to expand its footprint in metals and minerals such as green steel and lithium.

William Chin, Commodities Head at SGX Group, pointed out the close relationship SGX Group has built with the financial and business community in India in the past decades and the importance of collaboration with partners and stakeholders to develop solutions to serve participants in both markets.

Risk hedging products related to the Indian infrastructure development, green initiatives, ESG as well as new energy minerals and metals are some of the areas SGX Group wants to focus on, Chin said.

"We are expanding our footprint in metals and minerals such as green steel and lithium," said Chin, noting the surging demand from the massive infrastructure development, industrial production and renewable energy-based electric vehicles underpinned by India's new crown as the world's most populous nation.

Chin believes Indian businesses as a core stakeholder group will play an important role in price discovery of such critical products while the government continues to drive initiatives such as exploring minerals from the country's resource-rich basins.

"We can consider investing in the development of contracts for new minerals in partnerships with Indian businesses, that serves price discovery that is central to Indian trade flows," said the senior SGX executive, pointing out the open borderless trading through internet-based networks.

Chin especially highlighted the global nature of SGX's more than 10-year-old iron ore contract, which while being China trade-centric, is a useful reference for the ferrous trade in India as a fast-industrializing nation.

"China and India are globally-respected big markets, and, at SGX, we already have a big and growing network across businesses in the two countries," Chin said.

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On Indian participation in SGX's iron ore contract, Chin highlighted that a daily trade volume of over 161,000 lots was recorded in March 2023 and 156,000 lots in April.

"We are very encouraged by this increase in daily iron ore volume by India-based participants and we see it growing multi-fold," Chin said.

The Singapore International Ferrous Week (SIFW), to be held May 22-26, 2023, is expected to draw Indian participation on a large scale. Chin also sees global experts at the Ferrous week especially specialists on ESG, sustainability and carbon.

"We want to understand how ESG, sustainability and carbon would play roles in future trading of products and materials linked to infrastructure developments and industrialization programmes," he said.

The ferrous week platform will also have a big delegation from China, after several years of absence due to travel restrictions of COVID-19 among other economic challenges.


Edited by Kanishk Singh