May 20, 2025
SINGAPORE – Singapore’s construction sector is starting to see some fallout from US President Donald Trump’s global tariffs, with firms here grappling with uncertainty over pricing and supply of raw materials, according to local industry associations.
But analysts are mixed on the tariffs’ impact on construction materials costs in Singapore, even as the temporary truce reduces the risks of acute global supply chain disruptions.
“New US tariffs on steel and aluminium are tightening global supply chains, and Singapore is starting to feel the strain,” said Mr Benjamin Lim, Singapore Manufacturing Federation’s (SMF) industry group chairman for building products and construction materials.
“Mills in China and India are fully booked for the next six to seven months as US buyers stockpile materials, limiting availability in Asia, and driving up costs.”
On May 12, the US and China agreed to suspend part of their tariffs on their respective exports for 90 days. This was the latest development in what has become a tit-for-tat exchange between the two superpowers over trade since the US leader announced sweeping global tariffs on April 2.
Despite the 90-day truce, analysts pointed out that the 25 per cent sector-specific tariffs on steel, aluminium, automobiles and auto parts announced in March and April remain in place, albeit with rebates for vehicles assembled in the US and a partial exemption for the UK.
The 10 per cent universal tariffs announced on “Liberation Day” are also still in place.
Tariff uncertainty has wreaked havoc on aluminium prices, which jumped from US$2,449.90 per tonne in September 2024 to a peak of US$2,658.30 per tonne in March 2025, before dropping to US$2,371.60 per tonne in April.
“This swing in aluminium prices over a few months is causing uncertainty in budgeting and procurement,” Mr Lim said, adding that some building materials manufacturers here have seen higher aluminium costs and longer lead times.
This refers to the number of days or weeks from the time orders for parts or materials are placed until the finished product is ready for delivery.
“For major projects, a 5 to 10 per cent increase in material costs could add millions of dollars in costs to budgets. Delays in delivery and unpredictable pricing are also disrupting timelines. Materials like facades and fittings, which rely heavily on aluminium, are especially affected,” he added.
“While April’s aluminium price dip offers short-term relief, global trade uncertainty suggests continued turbulence ahead,” he warned.
Mr Lim noted that the local construction industry has not been too badly hit by the tariffs on steel so far. “However, if global steel prices increase due to redirected demand and tighter supply, we may start to feel the effects over the next three to six months,” he said.
Singapore Contractors Association (Scal) president Lee Kay Chai noted that sector-specific tariffs on steel and aluminium have the potential to raise costs for Singapore’s construction sector.
But the 90-day truce may provide a “temporary window of stability” in global pricing, even though volatility remains a concern over the long term, he said.
“The actual cost impact in Singapore will still depend on how long-term supply arrangements and market sentiment adjust,” he said.
“The construction ecosystem remains vulnerable to any re-escalation of trade tensions, and contractors must remain vigilant about project timelines and materials availability in the second half of 2025.”
Although the risk of acute global supply chain disruptions is reduced for now, short-term supply re-directions are possible as Chinese exporters seek to re-route goods to markets in the region, such as Asean, said Mr Lee.
Experts say Chinese exporters are doing so for two reasons: to tap burgeoning construction demand in the region, and also because their goods could gain access to US markets at lower tariff rates if the final processing was done at a third-party country such as Indonesia before being exported to the US.
Meanwhile, some experts believe that the tariffs could benefit the construction sector in the Asia-Pacific as raw materials may get cheaper in the near term.
Dr Dominic Brown, Cushman & Wakefield’s head of international research, noted that the tariffs on steel and aluminium – and potential retaliatory action from the European Union – are expected to push up construction costs in the US and the EU, and slow the construction pipeline.
In the short term, this may lead to excess product in the market. “The Asia-Pacific, which currently has fewer tariffs in place and a significant construction pipeline of over 230 million sq ft of office space, is a likely destination for this surplus. This could lead to short-term price deflation in raw materials here,” Dr Brown said.
But he pointed out that raw material costs are only one component of overall development costs.
So even though the Asia-Pacific may benefit from lower raw material input costs in the near term, rising shipping fees, local labour and land costs continue to influence project viability, he added.