[SINGAPORE] Singapore’s construction industry is beginning to feel the ripple effects of US President Donald Trump’s global tariffs, as firms grapple with rising uncertainty surrounding the pricing and availability of raw materials, local industry associations say.
While a recent temporary truce in the US-China trade dispute has reduced the immediate risk of widespread supply chain disruptions, analysts remain divided over the long-term implications for construction material costs in Singapore.
Beyond short-term price swings, industry observers warn of deeper structural vulnerabilities. Smaller subcontractors and suppliers—often operating with slimmer margins—are especially exposed to unexpected cost hikes. Many lack the leverage to renegotiate contracts mid-project, heightening their financial risk when material prices spike.
“New US tariffs on steel and aluminium are beginning to strain global supply chains, and Singapore is not immune,” said Mr Benjamin Lim, chairman of the building products and construction materials industry group under the Singapore Manufacturing Federation (SMF).
“Mills in China and India are booked solid for the next six to seven months, as US buyers ramp up orders in anticipation of further trade measures. This limits supply across Asia and is already pushing prices higher.”
On May 12, the US and China agreed to pause parts of their tariff dispute for 90 days—marking the latest step in an ongoing tit-for-tat trade war that began when the US announced sweeping global tariffs on April 2.
However, sector-specific tariffs of up to 25 per cent on steel, aluminium, automobiles, and auto parts remain in effect. While certain exemptions have been granted—such as rebates for US-assembled vehicles and partial relief for UK exports—analysts note that core duties are still in place.
Adding to the complexity is a shifting geopolitical trade landscape. With China pursuing new trade alliances through initiatives like the Regional Comprehensive Economic Partnership (RCEP), some analysts suggest that Southeast Asia could become a critical outlet for redirected steel and aluminium exports—potentially reshaping pricing dynamics in Singapore depending on regional demand trends.
Meanwhile, broad-based 10 per cent tariffs announced on “Liberation Day” also continue to apply. Aluminium prices have borne the brunt of tariff volatility. After peaking at US$2,658.30 per tonne in March 2025—up from US$2,449.90 in September 2024—prices fell to US$2,371.60 by April.
“This kind of price fluctuation makes it very difficult to budget and manage procurement,” said Mr Lim, adding that some manufacturers are already reporting elevated costs and longer lead times for aluminium-based materials.
To manage risk, some contractors are sourcing from alternative markets such as Vietnam and Turkey. But while this strategy could cushion supply shocks, it introduces new issues—including inconsistent quality standards and extended shipping durations—that may undercut any savings.
“For large-scale projects, a 5 to 10 per cent hike in material costs can translate into millions in added expenditure,” Mr Lim said. “Delays and erratic pricing are also disrupting schedules, especially for aluminium-reliant components like facades and fittings.”
While the recent dip in aluminium prices has offered brief respite, Mr Lim cautioned that broader trade uncertainties are likely to sustain a volatile pricing environment moving forward.
On steel, the impact on Singapore has been limited so far, Mr Lim noted. “But if global steel prices rise due to redirected demand and tighter supply, local firms could start to feel the pressure in the next three to six months,” he warned.
Singapore Contractors Association (Scal) president Lee Kay Chai acknowledged the potential cost pressures stemming from steel and aluminium tariffs. Nevertheless, he said the 90-day truce may provide a short-lived period of pricing stability, even as long-term volatility persists.
“The real cost implications in Singapore will hinge on how supply arrangements and market sentiment evolve,” Mr Lee said. “Contractors need to stay alert to shifts in materials availability and project scheduling in the second half of 2025.”
While the risk of a major global supply chain breakdown appears reduced for now, short-term realignments are possible, Mr Lee added, as Chinese exporters look to redirect shipments to ASEAN and other regional markets.
Analysts cite two key motivations: rising construction demand within the region, and the possibility of circumventing US tariffs by completing final product assembly in third-party countries like Indonesia before re-exporting to the US.
Some experts even argue that the tariffs could present short-term opportunities for the Asia-Pacific construction sector, as excess supply may drive down raw material prices.
Dr Dominic Brown, head of international research at Cushman & Wakefield, noted that higher construction costs in the US and EU—stemming from tariffs and potential retaliatory measures—may temporarily suppress demand there, resulting in a surplus of raw materials.
“With fewer tariffs and a strong construction pipeline—over 230 million square feet of office space—the Asia-Pacific region is well positioned to absorb this surplus, possibly leading to near-term price declines,” he said.
However, Dr Brown emphasised that material costs are just one part of overall development expenses. “Even if raw input costs ease, rising shipping, labour, and land prices in the region will continue to shape project feasibility,” he added.
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