Beyond the Iron Ore Franchise
SGX’s iron ore derivatives franchise is the benchmark against which its other commodity ambitions must be measured. The exchange’s IODEX futures and options complex routinely trades hundreds of millions of metric tonnes monthly—August 2026 alone saw 468 million mt in total volume, with the front-month contract settling at $99.60/dmt. Financial institutions now constitute slightly over 50 per cent of trading volume, up from 29 per cent in 2020, while participation from outside Asia has grown from approximately 17 per cent to more than 30 per cent.
This evolution—from a physical-trade-dominated market to one where financial participants and index investors drive liquidity—provides the template for SGX’s expansion strategy. The exchange is now targeting adjacent markets where the same structural transition is underway.
Coking Coal: A Unique Contract for a Divergent Market
SGX plans to launch a coking coal futures contract that will be geared towards second-tier coking coal rather than premium hard coking coal. This distinction matters. Second-tier coking coal is used by countries such as China for blending purposes, and the contract will be unique to SGX—no other exchange offers it.
Tan Tee Yong, SGX’s head of commodity derivatives, explained the rationale: “Based on market feedback, there is pricing divergence from premium coking coal, creating basis risk so there’s a need for hedging”. India’s position as a net importer of coking coal makes it a natural growth market for this contract, particularly as the country’s steel production capacity expands.
Steel: Moving Beyond Rebar
SGX currently offers derivatives contracts for steel reinforcing bar (rebar), primarily used in construction. A new hot rolled coil steel contract is in development to serve the international trading community, expanding the exchange’s coverage of the steel value chain. Combined with the coking coal contract, these products would enable SGX to offer a more complete “virtual steel mill” hedging suite—a concept the exchange has already pioneered with its iron ore and premium coking coal FOB Australia contracts.
The Gold Contract That Completes the Picture
The most strategically significant element of SGX’s commodity expansion is its planned physically delivered gold futures contract. The exchange is already offering over-the-counter clearing for gold by the end of 2026 and is collaborating with J.P. Morgan, ICBC, Deutsche Bank, UOB, DBS, and OCBC for clearing.
Tan framed Singapore’s positioning carefully: “Singapore is well positioned to play a bigger role as a trusted node in connecting regional demand with global liquidity in the gold market”. The physically delivered contract would complement the OTC clearing system and provide a transparent, exchange-traded price discovery mechanism for Loco Singapore gold—a market that currently relies on London and New York for benchmark pricing.
Freight: The Connective Tissue
SGX’s freight derivatives franchise has seen forward freight agreement hedging activity increase 22 per cent compared to the previous year, driven by geopolitical uncertainty and Panama Canal congestion. The exchange listed a handysize time charter contract on June 22, 2026, focused on the Atlantic market, responding to client demand for more granular freight hedging tools.
For commodity investors, the integrated nature of SGX’s franchise—iron ore, coking coal, steel, freight, and now gold—creates cross-margining efficiencies and portfolio-level hedging capabilities that no single-contract exchange can replicate.
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