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Singapore Law Watch
21-05-2025
- Business
- Singapore Law Watch
Singapore construction sector sees fallout from US tariffs amid trade war truce
Singapore construction sector sees fallout from US tariffs amid trade war truce Source: Straits Times Article Date: 21 May 2025 Author: Grace Leong Firms feeling strain from uncertainty over pricing and supply of raw materials. 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. Source: The Straits Times © SPH Media Limited. Permission required for reproduction. 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Straits Times
19-05-2025
- Business
- Straits Times
Singapore construction sector sees fallout from US tariffs amid trade war truce
With the truce, the immediate risk of acute global supply chain disruptions has been somewhat reduced. ST PHOTO: LIM YAOHUI 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. 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,' said Mr Benjamin Lim, Singapore Manufacturing Federation (SMF)'s industry group chairman for building products and construction materials. 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 US President Donald Trump 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 in September 2024 to a peak of US$2,658.30 in March 2025, before dropping to US$2,371.60 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 five 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 time lines. Materials like façades 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 'tempora ry 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 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 on 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 EU — 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 square feet 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 near term, rising shipping fees, local labour and land costs continue to influence project viability, he added. Join ST's WhatsApp Channel and get the latest news and must-reads.
Yahoo
05-03-2025
- Business
- Yahoo
Alliance for Action releases Singaporean e-commerce packaging guidelines
The Alliance for Action (AfA), a body aiming for packaging waste reduction in the e-commerce sector in Singapore, has released a set of sustainable packaging guidelines for the country. The guidelines were developed by the members of the AfA, involving 14 companies across the e-commerce supply chain. The AfA is co-led by the Singapore Manufacturing Federation and Singapore Post, with support from the country's National Environment Agency. As per the AfA's estimates, 186,000 parcels were delivered daily in Singapore in 2023, resulting in approximately 15,900 tonnes of packaging waste. The new guidelines provide a detailed list of reduce, reuse, and recycle solutions tailored to various types of e-commerce packaging such as cardboard boxes, mailers, and fillers. Each solution comes with actionable steps for businesses, along with the anticipated benefits and potential drawbacks. The guidelines also aim to assist companies in selecting the most suitable solutions for them. An additional feature of the guidelines is a scorecard for company leaders to evaluate their sustainable packaging management practices and identify areas for improvement. Real-world case studies within the guidelines suggest that companies could reduce their packaging needs by up to 90%, for example, by switching from corrugated cardboard boxes to paper mailers of a similar size. To facilitate the adoption of these guidelines, the Packaging Partnership Programme, administered by the Singapore Manufacturing Federation, will conduct workshops for businesses. "Alliance for Action releases Singaporean e-commerce packaging guidelines" was originally created and published by Packaging Gateway, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
