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Supply disruptions from the Russia-Ukraine war and ongoing supply chain issues will cause prices of core construction materials in Singapore, such as copper, steel, concrete, cement and bricks, to remain elevated in the next few quarters. Both steel rebar and copper prices are expected to go up by 11.9 per cent in the third and fourth quarters of this year, compared to the same period a year ago. Initially, the projection was that prices of raw materials will decrease this year. However, with the Russia-Ukraine war shocking markets and China’s New Strain of COVID-19, the supply of raw materials faced major disruption and prices have gone up instead.

Russia and Ukraine are key suppliers of steel and iron ore to the European Union, and the regional disruptions to trade will mean European buyers seek alternative source markets, thereby tightening global supplies. According to NatSteel, steep rebar prices in Singapore had already risen 15 per cent by mid-March since the start of the conflict, and imports from Turkey and the Middle East were limited because of higher energy and transportation costs, as well as preferences to target European buyers. In addition to the supply disruption from the ongoing war, the new strain of COVID-19 in China has led to lockdowns and production disruption. Since China generates the greatest production of raw materials like cement, this has threatened global supply chains of raw materials.

Cement is one of the most used commodities in construction projects in Singapore, and given the outlook for relatively high prices for raw materials and transportation costs, cement prices are projected to go up 19.9 per cent in the third and fourth quarters of 2022, compared to the same period a year ago. Statistics showed that cement prices have already gone up by around 7 per cent in the first 2 months of the year and has faced continued upward pressure in March.

In addition, the price of bricks is also expected to go up 3.6 per cent year on year in the second half of 2022, as demand is expected to improve as construction output continued to recover. Even though supplies will likely be sufficient to meet this rising demand, higher energy prices will push up production costs, causing brick prices to trend upwards in the coming quarters.

For more information refer to the link below:

Prices of core construction materials in Singapore to remain high in next few quarters, Energy & Commodities – THE BUSINESS TIMES

In view of the increases of prices of raw materials and energy due to the unstable global market, it can be difficult to maintain the quality of raw materials in a destabilised supply chain. The impact on the Construction Sector should not be overlooked. It is crucial to ensure the quality of raw materials as it can affect production yields and final product quality. At RAK, we conduct tests on building materials and aim to be a Trusted Testing Partner that brings clients the highest degree of quality and safety in products. Contact us to get a quote today.

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