6 November 2025

This Week’s Cost Intelligence

 

The first published index settles at 101.39, down 1.21% on the week and 1.39% above our September baseline. After modest October gains this is a metals-led pull-back, not a turn in the market, and it reads as a buyer’s window: most of the basket eased, with only Lead (up 0.62%) and Zinc (up 0.42%) firming, both tied to galvanising and weatherproofing scopes.

 

The decline was broad and led by Bitumen, down 6.18%, followed by Platinum 4.27%, Polyvinyl 3.64%, Copper 2.50% and steel-rebar 1.73%. That correction opens a short procurement window across roads, waterproofing, electrical and mechanical scopes, and gives structural budgets some breathing room. Where programme allows, this is the week to secure the falling items before the market rebalances.

 

Two forces run the other way. Freight firmed, with the Baltic Dry up 4.93% to 2,063 and Capesize up 10.69% to 3,242, so build landed cost, not mill price, into bulk imports. On currency, the Dirham firmed against every partner except the Rupee, the Pound easing most at 0.81%, a small but free saving on UK and European sourcing while contracts are still open.

 

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Steel – Moderate Uptrend (▲) Forecast:

 

Steel softened this week, with rebar down 1.73% and HRC down 0.35%, but both remain modestly above the September baseline. The near-term bias is slightly upward, as Chinese output stays constrained and GCC fabrication demand picks up following the holiday period.

 

Watch: rebar and HRC could firm a further 0.5% to 1.0% if restocking continues. Procurement teams should secure forward cover on structural steel and reinforcement packages where exposure is significant, ahead of any restocking-led uplift.

Copper – Mild Correction (▼) Forecast:

 

Copper eased 2.50% this week, though it still holds a strong 14.76% gain year to date. The near-term outlook carries mild downside risk, driven by a firmer US Dollar and softer Chinese manufacturing data.

 

Watch: MEP cable and busbar pricing may hold stable to slightly lower. Project teams with upcoming electrical, MEP or data-centre packages can use this softening to lock in copper-dependent items at improved rates before the market rebalances.

 

Diesel – Mild Easing (▼) Forecast:

 

The UAE pump rate eased to AED 2.67 per litre this week, down from AED 2.71 (a 1.48% cut), tracking softer global oil. It is likely to hold around AED 2.65 to 2.68 per litre in the near term.

 

Watch: minor relief on logistics, equipment hire and plant operation costs. Teams running plant-heavy or logistics-intensive packages should factor this modest easing into near-term cost planning.

 

Our Commercial Interpretation

 

Prices aren't falling across the board, but most of the basket eased this week. The only firmness sits in the galvanising metals, zinc and lead, while the real cost pressure is in bulk freight rather than materials. Copper, platinum and the wider metals complex all came off, so the smart move is targeted buying on the falling scopes and holding forward cover only on galvanised metalwork, not a full inflation adjustment to your budget.

 

Role of Zinc in the Construction Industry

 

Zinc is a foundational input across multiple construction disciplines, occupying a critical position in structural protection, mechanical and electrical systems, and architectural metalwork. Its primary application in the built environment is hot-dip galvanising, which provides long-term corrosion protection to structural steelwork, reinforcing bar, façade sub-frames, cable management systems, and exposed metalwork on infrastructure projects.

 

In the Middle East, where coastal salinity, humidity, and intense UV exposure accelerate corrosion cycles, the specification of hot-dip galvanised components is standard practice on virtually all mid to large-scale commercial, infrastructure, and industrial developments.

 

Product Categories in the Middle East Zinc Market

 

Four product categories define the bulk of zinc consumption on a typical GCC construction site:

 

1. Hot-Dip Galvanised Structural Sections – Universal beams, columns, hollow sections, and purlins specified for steel-frame buildings, plant structures, and industrial facilities

 

2. Galvanised Reinforcing Bar and Mesh – Used in marine, coastal, and aggressive-environment concrete structures where the chloride-induced corrosion risk exceeds standard epoxy coating tolerances

 

3. Zinc-Based Alloys and Die Castings – Hardware, ironmongery, security fittings, and MEP accessory components across fit-out and mechanical packages

 

4. Zinc Oxide and Specialty Chemical Products – Incorporated into rubber-based waterproofing membranes, anti-corrosion primers, and certain cementitious grout formulations

 

Market-Driven Zinc Costs and Their Toll on Middle East Construction

 

Zinc is showing a controlled upward bias, with the LME spot rate up 0.42% week-on-week to USD 3,052.85 per tonne as at 06 November 2025. Tight LME inventory and steady GCC galvanising demand point to continued firmness rather than near-term relief on zinc-sensitive packages.

 

Three cost implications for GCC contractors. Galvanised steelwork packages (structural sections, cable management, cladding sub-frames) are absorbing higher zinc feed costs, so any budget still priced at Q3 2025 zinc levels needs refreshing. Ironmongery and hardware-intensive fit-out is tracking higher, with surcharges now appearing on orders beyond eight weeks forward. Waterproofing packages using zinc oxide membranes are seeing minor uplifts, mainly on marine and industrial work.

 

Freight is mixed this week: the Baltic Dry Index is up 4.93% to 2,063 points and Capesize up 10.69% to 3,242 points, while container freight has eased 3.21%. Lock galvanised metalwork and cable tray packages in early, refresh any budget priced at Q3 zinc levels, and confirm galvanising coating thickness at procurement stage to avoid repricing on specialist marine scopes.

 

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Stonehaven Analysis 

 

The AED firmed slightly against most major trading currencies this week. AED is up 0.81% vs GBP, 0.75% vs AUD, 0.66% vs EUR, 0.52% vs SGD, 0.12% vs JPY, and 0.10% vs CNY. The one exception was the Indian Rupee, against which the AED eased 0.09%.

The Indian Rupee was the sole currency to strengthen against the Dirham this week, though only marginally. Overall the cross-rate movements stayed contained, with the AED holding a mild firming bias across the basket and no aggressive direction in any single pair.

The takeaway: imports from the UK, Europe, Australia, Singapore, Japan and China are slightly cheaper this week, while Indian-sourced items are a touch more expensive.

Impact on Construction Costs

 

1. Imported Materials

A firmer AED against most majors means imports from Europe, the UK, Australia and China cost a little less this week. That includes facade systems, MEP equipment and structural steel components.

What this means:

• Slightly lower landed costs on European, UK, Australian and Chinese-sourced materials

• Marginally higher cost on Indian-sourced finishes and labour-linked components

• The shifts are small, but they add up on import-heavy packages

2. Currency Risk

Currency moves are mildly working in our favour this week, but the shifts are small and driven by outside factors like global rate expectations and the wider economy, so they can flip quickly.

What this means:

• No need to change your cost plans right now

• Keep watching, especially on long-lead procurement packages

• Don’t bank the saving into budgets just because of short-term currency moves

Overall Market Position

Currency moves this week are giving a small amount of relief on imports rather than adding pressure. The shifts are mild, not game-changing, and need ongoing monitoring rather than a budget response.

In short:

• Materials: Mild relief on European, UK, Australian and Chinese imports, small pressure on Indian sourcing

• Overall: Stable, with light import-cost relief rather than a pressure.

Stonehaven Procurement Strategy Index (SPSI)

The SPSI provides a simple view of current procurement risk in the construction market, based on three key factors:

• Market Volatility (MVEI) – how much material prices are moving

• Import & Currency Exposure (ICEI) – how much currency changes affect what you import

• Energy & Logistics (ELEI) – how much fuel and freight costs are pushing things up

Each one scores 1 to 4, where 1 means stable and 4 means high risk. The overall SPSI uses the same scale:

• Below 1.5: Low risk – market stable, very little price movement

• 1.5 to 2.25: Mild risk – small price moves, keep an eye on it

• 2.25 to 3.25: Moderate risk – clear market movement, take targeted action

• Above 3.25: High risk – the market is shaky, review your buying right away

Current Position (06 Nov): SPSI = 1.70 (Mild Risk)

• MVEI = 2 → mild material price volatility, driven by a sharp correction in bitumen (down 6.18%), partially offset by firmness in zinc (up 0.42%); the broader basket is moving in a controlled way

• ICEI = 1 → low import exposure risk, reflecting AED strength against GBP, EUR, AUD, JPY and SGD, a stable USD peg, and broadly flat CNY positioning

• ELEI = 2 → mild energy and logistics pressure, with the Baltic Dry holding at multi-month highs and Capesize firming, container freight easing modestly, and diesel stable at AED 2.67/L

Methodology of SPSI Calculation:

 

The SPSI combines three sub-indices into a single weighted score: Market Volatility Exposure (MVEI) at 45%, Import & Currency Exposure (ICEI) at 30%, and Energy & Logistics Exposure (ELEI) at 25%.

The 45/30/25 split reflects how construction costs are built and how material price moves drive the largest week-on-week shifts, currency exposure on imports comes second, and freight and energy costs third.

This week's calculation: (MVEI 2 × 0.45) + (ICEI 1 × 0.30) + (ELEI 2 × 0.25) = 1.70 (Mild Risk).

Interpretation:

 

The market sits in the mild risk band this week. There is selective pressure in zinc-linked galvanised scopes and in bulk shipping, while bitumen’s correction opens a procurement opportunity on waterproofing and roads scopes. Structural materials and currency exposure remain broadly contained.

Buying conditions are still manageable for normal procurement, but galvanised-metalwork and freight-sensitive packages need targeted attention. Keep routine checks going on LME inventories, shipping indices and AED cross rates so you spot any sustained escalation early.

Procurement Recommendation

 

1. Material Procurement: The bitumen correction (down 6.18%) opens a short buying window on waterproofing and roads scopes, so secure those where programme allows. Zinc’s firmness (up 0.42%) sustains mild pressure on galvanised metalwork, cable tray and cladding sub-frame scopes, where forward cover is worth locking. No escalation triggers are warranted on live fixed-price contracts at this MVEI reading.

2. Currency & Import Strategy: This is the most favourable import cost environment recorded, with the AED firm against EUR, GBP, AUD, JPY and SGD and the USD peg stable. Accelerate forward commitments on European, Japanese and Antipodean-sourced packages while the FX window remains open. Hedging is not needed unless exposure runs past 60-day forward windows.

3. Energy and Logistics Cost Management: Diesel pricing in the UAE is stable at AED 2.67/L for November 2025, giving a predictable transport cost baseline. However, Capesize firmness (up 10.69%) introduces upstream rebar cost transmission risk over the coming six to eight weeks, while container softening gives modest relief on manufactured imports. Consider consolidating bulk shipments and reviewing CFR/CIF terms on upcoming orders.

4. Continuous Monitoring: The principal watch item is the Capesize trajectory and its feed-through into structural steel pricing. Stay on top of LME inventories, Baltic Exchange shipping indices, and AED-EUR/AUD cross rates to catch any sustained escalation early.

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Commercial Guidance

 

1. Structural & Steel Packages

Zinc and lead were the only inputs to firm this week, so a little pressure is showing up in galvanised metalwork and lead-linked components.

The main structural inputs like steel-rebar, HRC and CRC all eased or held steady, so the primary structural packages are commercially balanced and slightly easier than last week.

The modest cost risk sits with galvanising and lead-based scopes, not the primary steel structure.

2. Industrial, Commercial & Infrastructure Projects

Easing in copper, platinum and steel-rebar is helping keep structural and MEP costs balanced this week. Aluminium also softened, supporting facade and cladding budgets.

The one pressure is firming bulk freight, with the Baltic Dry and Capesize both up, which pushes logistics costs on bulk and imported materials.

Apply cost buffers only to shipping-sensitive bulk deliveries, not across all trades.

3. MEP, Finishes & Specialist Imports

Copper eased 2.50% and platinum 4.27% this week, opening a short window to lock in copper-linked MEP, cable and specialist equipment scopes at improved rates before the market rebalances.

Polyvinyl, bitumen and aluminium also softened, so there is an opportunity to secure good prices on pipework, waterproofing and facade packages.

Procurement Strategy

We recommend a targeted approach, with timing in mind. Take advantage of the broad softening to lock in falling inputs (bitumen, platinum, polyvinyl, copper), and hold forward cover only on the two materials still firming, zinc and lead.

Most other materials should stay under active monitoring because the moves are mild and bulk shipping costs are still rising.

Overall Commercial Position

Construction cost risk remains controlled and execution-driven, with the only upward pressure linked to galvanising metals (zinc and lead) and bulk freight, while the wider material market is easing into a favourable cost environment.

With the SCI easing to 101.39 (down 1.21%) and a firmer AED reducing import costs, structural and commodity-linked inputs remain manageable, supporting a measured, strategy-led procurement approach.

Important Disclaimer

The Stonehaven Cost Index (SCI) is for general information only and is not a commitment, guarantee, or offer to contract at any price. The index is based on publicly available commodity data and our internal market view as of 06 November 2025. Actual project costs depend on the specific scope, how you procure, and what's agreed commercially.

Stonehaven Project Management Services LLC accepts no liability for any loss caused by relying on this document without proper project-specific advice. The index shows general market movement based on weighted construction inputs.

FAQ's

1. What is the Stonehaven Construction Cost Index and how is it calculated?

The Stonehaven Cost Index (SCI) tracks weekly price movements across key construction materials, freight indices, and currency pairs relevant to the UAE and Saudi Arabia. Data is collected every week and reviewed by Stonehaven's cost management team before publication. The index is indicative and does not constitute a tender price or contractual valuation.

2. What affects construction material prices in the Middle East?

Several factors influence construction material prices in the Middle East, including global commodity markets, shipping costs, fuel prices and currency movements. Materials like steel, copper and bitumen are particularly sensitive to international demand and logistics conditions, which directly impact construction cost trends in the GCC.

3. How often do construction material prices change?

Construction material prices can change daily depending on global market conditions. Factors such as commodity prices, shipping costs and fuel rates influence short-term movements, which is why tracking weekly construction material price updates is important for sensitive cost planning.

4. How is the Stonehaven Construction Cost Index prepared?

The construction cost index is prepared using weekly data collection across key materials, currencies and freight rates. Cost managers monitor these movements to reflect current conditions. This is then reviewed by the commercial management alongside foreign exchange and logistics trends, which influence construction pricing across the GCC before presenting to our readers.

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