The HC Commodities Podcast
Episode: Trading in Asia with Iain Lawson
Date: December 3, 2025
Host: Paul Chapman, HC Group
Guest: Iain Lawson, Senior Advisor at Baringa
Episode Overview
This episode explores the evolving landscape of commodity trading in Asia—with a focus on Singapore’s enduring role as the region’s trading hub. Paul Chapman and his guest, industry veteran Iain Lawson, delve into the significance of Singapore, contrasts with other global trading centers, the distinctive business and regulatory climate across Asian markets, and how factors from geopolitics to decarbonization are shaping the sector’s future in the region.
Key Discussion Points & Insights
1. Singapore as Asia’s Commodity Hub
[02:06 – 06:04]
- Strategic Emergence: Singapore evolved as a commodities trading center not just due to geography (deep water, proximity to the Straits of Malacca), but through active policy and infrastructure development.
- Developing the Ecosystem: Early reliance on imported talent has transitioned to cultivating robust domestic expertise, notably in trading programs at local universities.
“Singapore as a country exists because of trading. … It’s really just an accident of deep water through the Straits of Malacca that Singapore exists.”
—Iain Lawson [02:19]
- Contrast with Rivals: The city-state’s conscious effort to build a complete trading ecosystem and lean into its multicultural heritage differentiates it not just from Dubai (its regional rival), but also from historic financial centers like Hong Kong.
2. The Centrality of Oil and Refining
[06:47 – 11:43]
- Platts Pricing and Asset Strategy: Singapore’s role as a pricing hub makes physical assets there highly valuable, notably for traders who can optimize refinery operations as “call options on the margin.”
- China Linkages: Historically, Singapore’s strategic location enabled tailored crude blending for China’s “teapot” refineries, leveraging local storage and mixing infrastructure.
“The importance of Singapore as a center for Platts pricing is unquestionable. … It’s always much more interesting to be trading around an asset in a pricing hub than anything else.”
—Iain Lawson [06:48]
- Evolving Dynamics: While the Ukraine conflict and the Russian “gray market” have shifted some flows, Singapore’s core role for non-sanctioned crude remains unchanged.
3. Is a Singapore Operation Essential?
[10:07 – 12:07]
- Presence in the Hub Matters: For global strategics, being based in Singapore is vital for building relationships, accessing timely information, and maintaining a complete trading platform, especially in global products like crude and LNG.
“If you are trading a properly global product like crude oil or LNG … there’s a recognition that being close to the point of consumption is useful.”
—Iain Lawson [12:07]
- AI vs Human Connectivity: The importance of in-person relationships is emphasized—information is traded in bars and on the golf course, not just in algorithms.
4. Fragmentation and Cultural Nuances in Asian Markets
[13:24 – 15:31]
- Asia ≠ Homogeneous Market: Unlike the US/EU, cultural and commercial differences across countries (Japan vs Korea, Indonesia vs Malaysia, etc.) are pronounced. Nuanced understanding is critical.
“Europeans trade like Europeans. The US trades like the US. But the Koreans don’t trade like the Japanese…”
—Iain Lawson [13:48]
- Network Markets vs Fragmentation: Unlike integrated networks in the West, Asia trades mostly through discrete, often bilateral arrangements due to the lack of overarching grids or pipelines.
5. Gas and LNG’s Rising Role
[17:08 – 26:33]
- Portfolio Optimization Era: LNG’s value has shifted from the producer to those with flexible, global portfolios—optimizers—centralizing importance of being close to customers and markets.
“The economic rent … now accrues to whoever has a global portfolio to optimize and to be able to optimize that, you need a couple of things… access to trading information and contact with your customers.”
—Iain Lawson [18:10]
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China's Leverage: Upcoming pipeline capacity from Russia (Power of Siberia 2) will allow China to arbitrage between pipeline and LNG buys, affecting market dynamics for all Asia.
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Learning to Trade: National champions and traditional buyers (e.g., JERA, IOC) recognize the need for trading know-how, whether by building in-house or partnering with global traders.
“Not everyone wants to, needs to, or can build a trading platform and it might be sufficient just to have those key partners out there. But knowing… they will make—they’ll probably be driving Ferraris and you won’t.”
—Paul Chapman [22:40]
- Regulatory Drivers: Gas market liberalization must accelerate to truly enable optimization and spot trading; political factors heavily influence market structure.
6. Evolution of Power and Renewable Markets
[29:03 – 33:12]
- Japan’s Exciting Power Market: Traders are drawn to Japan for its active, interconnected cross-commodity market, though local presence is crucial for success due to specific market rules and behaviors.
- Singapore’s Power Dilemma: Reliant on imports for everything (including power), Singapore’s place in regional power trading is limited by the absence of physical interconnects and local generation resources.
- Regional Grid Potential: Long-term optimism exists for an interconnected ASEAN power grid, starting small with bilateral deals (e.g., Singapore importing renewables from Malaysia, Vietnam, or Java).
“Power is a tricky one for Singapore to be at the heart of, because power is intrinsically a grid and a network market, and there’s no network.”
—Iain Lawson [30:58]
7. Decarbonization, Biofuels, and Trading Complexity
[33:12 – 38:44]
- Biofuels Landscape: Asia is central to the biofuels market due to palm oil’s prominence; regulatory divergences persist (EU, US, Asia each accept/reject different feedstocks).
- Scalability and Credit Risk: Major challenge is scaling biofuels to meet growing mandates; credit risks increase due to fragmentation and the small scale of bio suppliers.
“It’s an inversion of the normal credit pyramid for conventional hydrocarbons. … That whole pyramid is inverted when you come to anything bio.”
—Iain Lawson [36:40]
- Mandate-Driven Demand: Upcoming SAF mandates (e.g., IMO 2030, EU blending) will further strain global biofeedstock supply; Asia remains essential source region, but with scaling constraints.
8. Origination in Asia: Relationship-Driven
[39:15 – 43:42]
- Country-First Origination: Unlike Europe or the US, doing deals in Asia hinges on detailed knowledge of each market’s preferences and cultural expectations. Relationships (“Guangxi”) are pivotal.
“Confucianism in general is much more comfortable with people that you already have a relationship with…”
—Iain Lawson [39:59]
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Example: Japanese negotiation styles, as described by Iain, illustrate how deals hinge less on logic alone and more on established rapport and deference to hierarchy.
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Personal Trust: Company relationships are important, but in many cases deals depend on individual credibility and trust between managers.
“He would approve things that other banks wouldn’t go near because he would come with me to the meetings and he’d look the other guy in the eye and say, will you give me your word…”
—Iain Lawson [42:53]
9. Cyclical Shifts in Market Players and Singapore’s Durability
[44:30 – 49:50]
- Trading Houses Endure: Despite cycles where banks, utilities, and producers gain and lose prominence, Singapore’s centrality as Asia’s market hub persists.
- Provenance and Regulation: The growing importance of tracking origin (especially for “green” or sanctioned products) opens new trading opportunities and complexities.
- China’s Opacity Backs Singapore’s Appeal: As China becomes riskier, Singapore’s safety, transparency, and support for traders have only increased its relevance.
“Trading is about differences. … That goes all the way back to the Silk Road. … Asia will never homogenize the way that the EU … or the US can. So there’s always going to be the possibility for capturing those dislocations.”
—Iain Lawson [44:36]
- Government Support: Singapore’s policy continues to favor the sector—through grants, flexible regulation, and clear recognition of trading as vital to its future.
Notable Quotes & Memorable Moments
-
On the limits of AI in trading:
“When the bots can drink beer and play golf, then maybe we’ll talk about it.”
—Iain Lawson [12:26] -
On origination and culture:
“Origination in Japan, for example, is fascinating. … The senior guy will stand up, bow deeply, and say, Mr. Lawson, we will consider your proposal. And that’s it.”
—Iain Lawson [40:21] -
On relationship-driven business:
“Business was getting done just because my credit manager had looked in the other guy’s eyes and said, yep, he’s going to stand by it.”
—Iain Lawson [42:58] -
On inversion of credit risk in biofuels:
“You’re dealing with lots and lots and lots of small people with limited loyalty. … Used cooking oil collectors will switch for a centiliter.”
—Iain Lawson [36:53]
Timestamps for Key Segments
- Singapore’s Origins & Evolution: [02:06]
- Refining and Hub Value: [06:47]
- China’s Market Changes: [09:16]
- Essential Nature of a Singapore Office: [10:07], [12:07]
- Fragmentation & Cultural Complexity: [13:24], [15:31]
- Gas/LNG Dynamics: [17:08], [18:10], [21:22]
- Biofuels, Scaling, and Regulation: [33:42], [36:40]
- Origination Culture and Relationships: [39:44], [42:53]
- Singapore’s Durability and Rivalry with Dubai: [44:30], [48:42]
Conclusion
The discussion paints a vibrant picture of Singapore as the indispensable pivot in Asian commodity trading—combining historic geographic advantage, proactive policy, and an ability to adapt to changing global economic and regulatory trends. The panel underscores that while technology and market structures may evolve, the region's complexity ensures a persistent need for on-the-ground expertise, personal relationships, and nuanced local knowledge.
Singapore, in Iain Lawson’s view, is set to remain Asia’s trusted, resilient hub for commodity trading for decades to come.