Mr Martin Abbott, CEO of LME,

 

Distinguished Guests,

 

Ladies and Gentlemen,

 

Good evening. It is my pleasure to join you at the London Metal Exchange Asia Dinner. Singapore is honoured to host this prestigious event and the Exchange’s Members. In its 135-year history, I believe this is the first LME dinner held outside the UK. I am glad to note that LME has chosen Singapore for this event.

 

LME’s presence in Singapore, and in Asia, goes back to 1987. Singapore was the LME’s first Asian delivery port outside Europe. Our good connectivity, proximity to consumer markets, and high standards in metals handling made Singapore an attractive delivery location. The establishment of LME’s presence provided a boost to metal trading activities here in Singapore, such as the setup of several warehouse operations for metals here.  Today, these warehouses form a significant part of our port and logistics operations.

 

 

Since the establishment of LME’s presence here 25 years ago, the metal trading sector here in Singapore has grown significantly. Today, Singapore captures 10 per cent of global market share of the trade for Aluminium and Copper intermediates. Many more companies in this space have come to Singapore. Today, we have 26 companies, representing the most important global players in this market.

 

Aluminum and copper trade continue to contribute the strongest flows, arising from booming demand for industrial materials from fast-growing Asian countries. This is expected to continue despite today’s volatile global economic environment. Some companies have even estimated that the world’s demand for commodities, including base metals, will double over the next 15 to 20 years.

 

Singapore has made it a priority to grow a healthy, vibrant trading ecosystem here. International Enterprise Singapore, the government agency that promotes international trade, has actively pursued opportunities to bring more trading companies and trading activities here, to build a community that is both deep and broad. These efforts have helped our trade sector to grow tremendously in the last twenty years. We started out developing the energy trading cluster, followed by agri-commodities and most recently, Metals & Minerals (M&M). M&M players in Singapore not only include steel stockists and base metals players, but also precious metals players.

 

Besides the trading companies, we have worked with many government agencies to encourage the growth of activities that support commodity trading. These include producers, logistics providers, brokers, traders, financial institutions and insurers.

 

Coupled with Singapore’s network of Investment Guarantee Agreements (IGAs) and Double Tax Avoidance Agreements (DTAs), more M&M companies use Singapore as an investment platform to venture into developing markets such as Indonesia and the Middle East. They have also tapped on our strong trading infrastructure for exploration, project origination and have also listed out of Singapore.

 

I am pleased to note that the LME has taken advantage of Singapore’s strengths to grow its activities here. As the focus of metals trading shifts increasingly towards Asia, I am pleased to note that LME Asia’s headquarters in Singapore will design and run customised training programmes to meet specific needs in the region. Such activities will help to strengthen LME’s industry position, and will also help Singapore to be more attuned to regional demand trends.

 

 

Today, Singapore is recognised as having one of the world’s most developed and sophisticated trading sectors. However, we cannot stay still. Patterns of demand and supply can change quite rapidly, because of technological innovation, economic cycles or other factors.

 

Singapore will continue to enhance our status as an international trading hub by anchoring new, high value-added trading clusters. For example, with increasing affluence in Asia, we now see strong demand for investment-grade gold. In Singapore’s Budget statement earlier this year, the Deputy Prime Minister and Minister for Finance announced that investment-grade gold and other precious metals will be exempted from Singapore’s Goods and Services Tax. This change brings our tax treatment in line with the practices of many developed economies, and we are optimistic that it will facilitate Singapore’s development into a precious metals trading hub.

 

Our Government remains committed to growing the metals trading cluster by anchoring more companies and trading related activities here. We will continue to work closely with the private sector and welcome your views and ideas on what can we do to further strengthen the trading sector here in Singapore.

 

On this note, I congratulate the LME for its expansion into Asia, and I wish you all an enjoyable evening ahead.