Category Archives: Cost Drivers Report

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tracking the trends

ASIA MANUFACTURING COST DRIVERS REPORT Q2– 2019 (Apr, May, Jun) Tracking The Trends Which Drive Costs In Asian Manufacturing

Category:Cost Drivers Report

Executive Summary

The commodity price trends in the second quarter are down in Asia. Many grades of Plastics, Steel, Metals, Fuel, Textiles and Ceramics raw materials prices were mostly down in price. While some grades of Alum, Wood and paper prices were all up. Labor rates were steady in the lower wage countries. The trend for World Container Index was increase. Only Rubber prices were mixed. The US Dollar was up a little bit against most of the Asian currencies in Q2. China imports and exports saw slightly up in this quarter. The China CPI was steady, and the China PPI was down marginally. The PMI indexes saw slightly down in Q2, PMI China was steady, while PMI Hong Kong and PMI USA saw faintly decreasing. Below is a chart of the general trends and for all the details, please see the entire report.

Report Details

PLASTICS & RUBBER

– Most of General Purpose plastic prices were down in second quarter. PP(Food Grade), PE (LD400/Injection) and PP (K8303) were all down over 3%, PVC (S700) and HIPS (PH88) both down marginally, while others were unchanged. Year over year, expect for HDPE (HHMTR210) up 3.8%, and PE (LD400/Injection) is steady, balance of the general plastic prices are down over 6% versus one year ago.

– Similarly, the second quarter of engineering plastic prices were down, except for Nylon (PA6) up 2.6%, ABS, PC (L-1250Y) and PU Foam were all down slightly. POM and Nylon (PA66) are both steady. Year over year, ABS in price is obviously down 17.4%, followed by PC (L-1250Y) down 4.8% and PU Foam is faintly down 2.1%, while the other prices are up on the average of 5.8% versus one year ago.

– Most of the Rubber prices were down in Q2, SCR5 saw a little up which is over 2%. EPDM saw obviously down in price, which was over 8%. Latex, CR prices were all down over 2%, BR9000 was down marginally. NBR price was steady. Year over year, SCR5, Latex and NBR prices slightly up which are over 2%, while EPFM in price is down 8.3%, followed by CR down 3% and BR9000 down 2.6% versus one year ago.

METALS

– For the second quarter of 2019, most of the prices for Carbon Steel were down. Hot Roll Steel Tube Cold Roll Steel Sheet and Cold Roll Steel Tube in price were down 6.1%, 5.9% and 2.3% respectively. While Hot Roll Steel Sheet and Steel Wire were both up over 2%. Pig Iron is unchanged. Year over year, expect for Steel Wire and Pig Iron are steady. Other carbon steels in price are down on the average 8.3% versus one year ago.

– In the Stainless Steel part, most of the grades of prices were down in the second quarter, with 410, 430 and 304 in price down on average of 3.5%, while 402 and 201 in price were up 3.4% and 0.6% respectively. Year over year, all the Stainless Steel prices are down over 4% versus one year ago.

– All aluminum prices were up faintly in the second quarter. Year over year, Only 6061 in price is up 2.5%, the rest of grades are down on the average of 0.9% versus one year ago.

– In Other Industrial Metals, all grades trend was decreasing in Q2, with Copper and Nickel in price were both down over 7%, Zinc and Brass Rod prices were down 5.3% and 3.9% respectively. Year over year, Zinc’s price is sharply down 18.6%, followed Nickel price up 15.2%, Copper price down 9.6% and Brass Rod price is down marginally versus one year ago.

WOOD, PAPER & TEXTILES

– Wood prices were slightly higher in Q2, except for Beech Hardwood was steady in price, Pine Softwood and MDF prices were up 0.5% and 1.6% respectively. Year over year, Beech Hardwood and Pine Softwood are up marginally, while MDF price is down 1.5% versus one year ago.

– Similarly, most grades prices of Paper Materials were up in the second quarter, with Kraft paper was sharply up 24.6%, followed Gray Cardbord was up 15.2% and White Cardboard was up 12.2% in price. While Corrugated Board and Art paper prices were down 14.7% and 7.4% respectively. Year over year, the trend for paper price is decreasing, with Corrugated Board and Art Paper both enormously down over 23%, Kraft paper is down marginally. Kraft paper and Gray Cardbord are up faintly versus one year ago.

– Textile fabric prices saw a little change in the second quarter, with Raw Cotton price was down 6.7% in price. While the rest grades prices were steady. Year over year, the grade in prices are mixed, with Raw Cotton price is sharply up 13.5%, but 100% Polyester Fabric price is up 5%. The rest of Textiles prices are unchanged versus one year ago.

CERAMIC AND GLASS RAW MATERIALS

-In Ceramic Raw Materials, the grades in price were up in Q2, with Alumina was obviously down 8.9%, Kaolin, Feldspar and Soda Ash were all up slightly. Year over year, Alumina is up moat which is over 17%, Kaolin’s price is up 2.3%. While other Ceramic and Glass material prices are up on the average of 4.7% versus one year ago.

FUEL

Fuel prices in China were generally going down, with LPG , Diesel Oil and Natural Gas prices were obviously down in the range of 2% ~15% in the second quarter. However, Petroleum price was unchanged. Meanwhile, year over year, all Fuel prices are decreasing in price, with Diesel Oil in price is significantly down 20.4%, the rest fuels are down slightly in price between 8%~15% versus one year ago.

OCEAN FREIGHT

The World Container Index was faintly up 0.4% in the second quarter. To the contrary, year over year, the World Container Index is slightly up 2% versus one year ago.

COST OF LABOR

All of the Asian labor rates were unchanged in Q2.Year over year, rates are up in most countries with Bangladesh rate is sharply up the most (over 50%) followed by Indonesia (up 9.4%), Vietnam and India both up over 5%, and China is up marginally.

CURRENCY EXCHANGE RATE

For the second quarter, the USD was slightly strength against the Vietnam Dong, India Rupees, China RMB and Taiwan New Dollars, while slightly weaker against Thailand Baht Bangladesh Taka and Indonesian Rupiah. Year over year, the biggest gains for the USD are against the China RMB, slightly strength against India Rupees, Bangladesh Taka, Taiwan New Dollars, and Vietnam Dong while its slightly weaker against the Thai Baht and Indonesia Rupiah.

CHINA TRADE (Data lags by one month)

– China Imports was slightly up 3.73% and Exports was obviously up7.65% in the second quarter. Year over year, China Imports is slightly down 1.66% while Exports are up 1.34% versus one year ago.

– The China Consumer Price Index (CPI) was unchanged while the China Producer Price Index (PPI) was faintly down 0.6% in the second quarter. Year over year, the China PPI is down 4.49% while the China CPI is up marginally versus one year ago.

PURCHASING MANAGERS INDEX (PMI)

USA PMI and Hong Kong PMI were both down slightly. Only China PMI was unchanged in the second quarter. Year over year, China PMI, China PMI and USA PMI are both down slightly, with UPS PMI down most which is over 14% followed by China PMI down 4.08%, while Hong Kong PMI is up 1.63% versus one year ago.

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 26 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.

For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information. Thank you for your support.

Visit our :http://www.sourceint.com/

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVERS REPORT Q4

Category:Cost Drivers Report

Executive Summary
The commodity price trends in the fourth quarter are mostly down in Asia. Many grades of Plastics, Rubber, Steel, Alum, Metals, Paper, Textiles raw materials and Fuel prices were mostly down in price while some grades of Wood, Freight went up in price. Labor rates were steady in the lower wage countries, and Ceramics price was mixed. The US Dollar was down a little bit against most of the Asian currencies in Q4. China imports and exports saw sharply down in this quarter. The China PPI and the China CPI were both down slightly. The PMI Hong Kong indexes saw a slightly improvement in Q4 while PMI China and PMI USA saw marginally down. Below is a chart of the general trends and for all the details, please see the entire report.

Report Details

PLASTICS & RUBBER
– Except for PET (SE-3030) was unchanged, the rest of General Purpose plastic resin prices were down in the fourth quarter, PP (K8303), HIPS (PH88), PP (Food Grade), PS (GPPS/688B) and PE (LD400/Injection) were down on the average of 10.8%, the others down in price marginally. Year over year, the prices is mixed. PE (LD400/Injection) and HIPS (PH88) prices are down 10.1% and 8.2% respectively, and PP (Food Grade) and PS (GPPS/688B) are down slightly, while HDPE (HHMTR210), PP (K8303) and PVC (S700) are up mildly in price versus one year ago.

– Engineering plastic prices were all down in the fourth quarter, ABS price was obviously down 11.9% and the balance plastic prices were down marginally. Year over year, ABS in price is down the most at 18.5% followed by PU Foam down 2.6%, while Nylon (PA66) and POM prices are up 6.0% and 9.6% respectively, and the others are only up marginally in price versus one year ago.

– Most of the Rubber prices were down in Q4, BR saw a huge down in price, which was over 19% and Natural, Latex, SCR5 and CR prices were all down over 2%. NBR and EPDM prices were steady. Year over year, SCR5 and Latex prices are down largely which are over 12% and BR down slightly, while EPFM up 9.1% , followed by CR up 6.3% and NBR up marginally versus one year ago.

METALS
– For the fourth quarter of 2018, all the prices for Carbon Steel were down, with Hot Roll Steel Tube was down the most which was over 19%, followed Pig Iron was down 12%, and others were down on the average of 9.7%. Similarly, year over year, the trend is all down with Hot Roll Steel Tube down the most at 21.1%. Others are down on the average of 10.6% versus one year ago.

– In the Stainless Steel part, all grades of prices were down in the fourth quarter, with down on average about 3.9%. Similarly, year over year, the trend is down, with 430 is down the most that over 14%, and other grades of stainless steel is down in price on average about 5.5% versus one year ago.

– All aluminum grades were down faintly in price in the fourth quarter. Year over year, all prices are down in price, with 6061 is down the most which is over by 12% followed A00 and 3003 down 6.8% and 4.6% respectively, and 1060 price is down marginally.

– In Other Industrial Metals, all grades trend was down in Q4. Nickel’s price was down by 14.8%, followed Copper down 4.1% in price and the rest of metals were down a little. Year over year, most of metals prices are down, with Nickel down most (close to 14%) followed by Nickel down 6.1%, Copper and Brass Rod are both down 3.1% versus one year ago.

WOOD, PAPER & TEXTILES
– Wood prices were slightly higher in Q4 except MDF was steady in price. Year over year, MDF’s price increase over 6% and Beech Hardwood over 3% respectively, and the Pine Softwood is up marginally.

– While all grades prices of Paper Materials were down in the fourth quarter, with Corrugated Board price was sharply down 16.1%, and others were down slightly. Meanwhile, year over year, all grades of paper in prices are decreasing, with Art Paper down over 11% and others prices down on average of 5.9% versus one year ago.

– Textile fabric prices saw little change in the fourth quarter with 100% Polyester Fabric and Raw Cotton down 9.7% and 5.9% respectively, while the rest were steady. Year over year, the grade in prices are mixed, with 100% Polyester Fabric up over 11.1%, but Raw Cotton is down in price at 2.5% while the rest are unchanged versus one year ago.

CERAMIC AND GLASS RAW MATERIALS
-In Ceramic Raw Materials, the grades in price were mixed in Q4. Except for Feldspar was unchanged, and Alumina and Quartz were down 10.8% and 2.6% respectively, while other grades in price were up slightly. Meanwhile, year over year, Soda Ash, Quartz Glass Grade Sand and Glaze are all down marginally while Kaolin and Feldspar are steady. Only Alumina is up 4.2% versus one year ago.

FUEL
Fuel prices in China were generally going down with LPG , Natural Gas and Diesel Oil were significant down in the range of 21% ~35% in the fourth quarter, and year over year, except for Petroleum is unchanged, Natural Gas is slightly down 7.4% and the rest fuels are down significantly in price between 26%~31% versus one year ago.

OCEAN FREIGHT
The World Container Index was slightly up 0.88% in the fourth quarter. Year over year, the World Container Index is sharply up 30% versus one year ago.

COST OF LABOR
Most of the Asian labor rates saw no change, except for India labor rates saw slightly up in the fourth quarter. Year over year, rates are up in most countries with Indonesia up the most (over 7%) followed by Thailand (up 6.56%), Vietnam (up 6.13%), China (up 5.22%) while India labor rate is down 13.45%. Bangladesh is unchanged.

CURRENCY EXCHANGE RATE
For the fourth quarter, the USD was slightly weaker against the Bangladesh Taka, Vietnam Dong, Thailand Baht, Chinese Yuan, Indonesian Rupiah while slightly strength against Taiwan New Dollars, and India Rupees. Year over year, the biggest gains for the USD are against the India Rupees and followed by China RMB, Taiwan New Dollars, Indonesia Rupiah and Vietnam Dong and while its slightly weaker against the Thai Baht.

CHINA TRADE (Data lags by one month)
– China Imports was obviously down 15.85% and Exports was slightly down by 2.43% in the latest fourth months. Similarly, year over year, China Imports and Exports are down by almost 7.34% and 4.57% respectively.

– The China Producer Price Index (PPI) and the China Consumer Price Index (CPI) were both slightly down 3% and 0.59% respectively in the fourth quarter. Year over year, the China PPI is down 3.81% while the China CPI is up marginally versus one year ago.

PURCHASING MANAGERS INDEX (PMI)
USA and China PMI were both down slightly. Only Hong Kong PMI was slight down 0.21% in the fourth quarter. Year over year, China PMI and Hong Kong PMI is down slightly while USA PMI is unchanged versus one year ago.

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.
For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information. Thank you for your support.

Visit our website at:   http://www.sourceint.com/

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVERS REPORT Q3

Category:Cost Drivers Report,Education,Manufacturing Tags : 

The commodity price trends in the third quarter in Asia are mostly up. Many grades of Plastics, Rubber, Steel, Alum, Wood and Paper raw materials rose in price while some grades of Metals, Textiles and Ceramics went down in price. Petroleum and fuel prices were up in this quarter and labor rates were steady in the lower wage countries. The US Dollar rose moderately against most of the Asian currencies in Q3. China imports and exports saw up in the quarter. The China PPI was down slightly while the China CPI was up slightly. The PMI USA and Hong Kong indexes saw a slightly improvement in Q3 while PMI China saw a little marginally down. Below is a chart of the cost driver trends in 2018-Q3 and for all the details, please see the entire report.

si asia manufacturing cost drivers report 18Q3

ASIA MANUFACTURING COST DRIVERS REPORT DETAILS

PLASTICS & RUBBER
– All General Purpose plastic resin prices were up in the third quarter, PP(K8303) and Food Grade are up significantly (on average about 8.9%) and the others only up in price marginally. Year over year, PVC and PE prices are down 7.2% and 4.3% respectively. But most plastic prices remain up in price versus one year ago. PP (K8303) is up the most (close to 22%), followed by PP up 13.7% and PS up 9.6% while PET price is unchanged.
Source international cost drivers report 2018 Q3

– Engineering plastic prices were more mixed with Nylon and Nylon (PA6) and POM prices up by 6.6%, 5.4% and 4.1% respectively, while ABS and PU Foam prices were down slightly. Year over year, ABS up in price the most at 21.4% followed by Nylon up over 11% and the others only up in prices marginally, while ABS and PU Foam were down marginally in price versus one year ago.

– Most of the Rubber prices were up in Q3, BR saw a huge up in price, up over 22% and Latex, SCR5 and CR prices were all up over 5%. NBR is the only one which down marginally in price. EPDM price is unchanged. Year over year, CR and EPDM prices up sharply which are over 19% and BR and NBR up slightly, while Latex and SCR5 down marginally versus one year ago.
Source international cost drivers report 2018 Q3

METALS
– For the third quarter of 2018, most of the prices for Carbon Steel were up, with Steel Wire is up most which was over 12% followed Pig Iron was up 8.5%, others were up marginally. Only Hot Roll Steel Sheet in price was down a little. Year over year, the trend is all up with Cold Roll Steel Tube and Pig Iron up over14% and others up slightly.
Source international cost drivers report 2018 Q3

– In the Stainless Steel part, 201, 410 and 304 prices were up on average about 3% while 420 and 430 grade down a little in the third quarter. Year over year, the trend is down with most grades of stainless steel down in price on average about 9%. Except for 304 price is up 3.7%.

– All aluminum grades rose faintly in price in the third quarter. Year over year, all prices were down in price, with 6061 is down the most which is over by 27% followed 3003 and A00 down 13.6% and 11.1% respectively, and 1060 price is down marginally.
Source international cost drivers report 2018 Q3

– In Other Industrial Metals, all grades trend was down in Q3. Nickel’s price was down by 11%, followed Zinc down 7.2% in price and the rest of metals were down a little. Year over year, most of metals prices are up, with Nickel is up most (close to 14%) and Copper and Brass Rod are both up 2.6% while Zinc price is down 12.8% versus one year ago.
Source international cost drivers report 2018 Q3

WOOD, PAPER & TEXTILES
– Wood prices inched slightly higher in Q3 except Pine and MDF is steady in price. Year over year, MDF’s price increase over 13% and the others only up marginally.
Source international cost drivers report 2018 Q3

– Meanwhile most grades prices of Paper Materials were no change except for Corrugated Board price down 4.1% in the third quarter. Year over year, most of the paper prices are decreasing, with Corrugated Board down over 16% and others prices down a little. Only Art Paper is steady.
Source international cost drivers report 2018 Q3

– Textile fabric prices saw little change in the third quarter with Raw Cotton down slightly and the rest were unchanged. Year over year, the grade in prices are mixed, with Raw Cotton and Polyester Fabric up in price t at 2.4% and 0.3% respectively while the 100% Polyester Fabric and 100% Cotton Fabric are down marginally.
Source international cost drivers report 2018 Q3

CERAMIC AND GLASS RAW MATERIALS
-In Ceramic Raw Materials, only Alumina price was up over 23%, while in Feldspar, Soda Ash and Kaolin were down in price on average 4.6% and rest were down marginally. Year over year, Feldspar, Kaolin and Quartz are all up marginally while rest were down, with Soda Ash is down in price the most by 16%, followed by Alumina down 5.9%, Glass Grade Sand and Glaze were down slightly versus one year ago.

Source international cost drivers report 2018 Q3

FUEL
Fuel prices in China were generally going up with LPG and Diesel Oil were significant in the range of 25% ~32% in the third quarter, and year over year, except for Petroleum is unchanged, the rest fuels are up significantly in price between 21%~29% one year ago.

OCEAN FREIGHT
The World Container Index was up 13.7% in the third quarter. Year over year, the World Container Index was sharply up 31% versus one year ago.

COST OF LABOR
Asian labor rates saw no change in the third quarter. Year over year, rates are up in most countries with Indonesia up the most (over 7%) followed by Thailand (up 6.6%), Vietnam (up 6.1%), China (up 5.2%) while India labor rate down 13.5%. Bangladesh was unchanged.

CURRENCY EXCHANGE RATE
For the third quarter, the USD is obviously strengthened slightly against the Thailand Baht, Chinese Yuan, Taiwan New Dollars, India Rupees, Indonesian Rupiah, Vietnam Dong and Bangladesh Taka. Year over year, the biggest gains for the USD are against the Indonesian Rupiah and India Rupees China RMB, Thailand Baht, Vietnam Dong and Indonesia Rupiah while its slightly weaker against the China RMB and Thai Baht.

CHINA TRADE (Data lags by one month)
– China Imports and Exports were both up by 11.36% & 4.61% respectively in the latest third months. Similarly, year over year, China Imports and Exports are up obviously by almost 15%.

– The China Producer Price Index (PPI) gone down 1.1% in the third quarter while the China Consumer Price Index (CPI) rose slightly. Year over year, the China PPI is down 3% while the China CPI is up slightly versus one year ago.

PURCHASING MANAGERS INDEX (PMI)
USA and Hong Kong PMI were both up slightly. Only China PMI was down 0.7% in the third quarter. Year over year, China PMI and Hong Kong PMI is down slightly while USA PMI is up slightly versus one year ago.

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.
For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information. Thank you for your support.
Visit our Linked-In Page

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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source international cost drivers report 2018 Q2

ASIA MANUFACTURING COST DRIVER REPORT, 2018 Q2

Category:Cost Drivers Report Tags : 

ASIA MANUFACTURING COST DRIVER REPORT, 2018 Q2

The ASIA MANUFACTURING COST of commodity price trends in the second quarter are mostly up across the board with a few rare exceptions. Most grades of plastics, industrial metals, paper, ceramic and glass raw materials all rose in price while only some grades of rubber and alumina for ceramic production were going down in price. Wood prices meanwhile remained mostly flat and Textiles prices were mixed. Petroleum and fuel prices were up in this quarter and labor rates inched up in the lower wage countries. The US Dollar rose a little bit against most of the Asian currencies in Q2. China exports saw up in the quarter while China imports were down. The China PPI was up slightly while the China CPI was down slightly. The PMI USA indexes saw steady improvement in Q2 and PMI China saw maintained while PMI Hong Kong was down significantly. Below is a chart of the general trends and for all the details, please see the entire report.

source international cost drivers report 2018 Q2

DETAILS

PLASTICS & RUBBER

The cost of the General Purpose plastic resin prices were up marginally in the second quarter with PP, PVC, PS, Food Grade PP, HIPS and HDPE and only PE (LD400) down in price by 2.0%. The PET remained steady. Year over year, the trends for most material were up. PP is up the most (close to 20.00%) followed by PP GP, PS, PVC and HIPS are all up over 8%, and HDPE and PE both up marginally and the PET is steady in prices versus one year ago.

source international cost drivers report 2018 Q2

ENGINEERING PLASTICS

Most of the Engineering plastic resin prices were up in second quarter with PC , POM and ABS marginally and only Nylon down in price by 2.6% , the others remains steady. Year over year, PP is up a whopping 28.9% followed by PC up over 10% and Nylon(PA66) and ABS relatively increase a little, while PU Foam is down by 4.5%.Nylon (PA6)is only grade which remains unchanged in price versus one year ago.

source international cost drivers report 2018 Q2

RUBBER

Most of the Rubber prices were down in Q2, Latex and CR are both down marginally and only NBR is up by 6.00%, while BR and EPDM are steady. Year over year, CR is up most (over 21%) followed by EPDM is up over 17% and others are all down with Latex and Nature Rubber down over 19% in price versus one year ago.

source international cost drivers report 2018 Q2

CARBON STEEL

– For the second quarter of 2018, most of Carbon Steels were up in price with Steel Wire up by 11.5% and the others up marginally. Hot Roll Sheet Tube is exception with a slightly decrease by 2.7% and Cold Roll Steel Tube and Pig Iron is steady. Year over year, the trend is all grades of Carbon Steel go up in price with Pig Iron and Cold Roll Steel Tube up over 23% following by Hot Roll Steel Sheet and Hot Roll Steel Tube up by 18.9% & 17.6%, and the rest are go up all over 8% in price.

source international cost drivers report 2018 Q2

STAINLESS STEEL

In Stainless Steel, most grades were down in price between 2% – 7% with #403 down the most while #304&#201 up a little in the second quarter. Year over year, the trend remains up with most grades of stainless steel up in price on average about 9% versus one year ago except for #410 down by 3.3%.

source international cost drivers report 2018 Q2

ALUMINUM

Most aluminum grades rose in price in the second quarter while Aluminum 6061 were down close to 6%, and year over year, Aluminum 6061 go down in price by almost 22% and Aluminum 3303 down by 4.9%, while A00 and Aluminum 1060 are slightly increased in price.

asia manufacturing cost drivers 2018 Q2

INDUSTRIAL METALS

In Other Industrial Metals, only Zinc price was down in Q2 while Nickel was up most (close to 22%) and the rest of metals were up marginally. Year over year, all grades of the prices are up especially Nickel is surged by 54.6% in price versus one year ago.

source international cost drivers report 2018 Q2

WOOD

Wood prices are remaining steady in Q2. Year over year, MDF’s price is up over 15% and the others only upmarginally.

asia manufacturing cost

PAPER

Most of Paper Materials were up in price in the second quarter with Corrugated Board up in price by 7.8% followed by Kraft Paper, White Cardboard and Gray Cardboard are up marginally and only ArtP aper decreased by 2%. Year-over-year,Corrugated Board and Kraft Paper prices are still higher  up by 29.3% and 18.7% respectively. The others are up marginally except for Art Paper is unchanged in price versus one year ago.

asia manufacturing cost drivers 2018 Q2

TEXTILES

Textile fabric prices saw mixed in the second quarter with 100% Polyester fabric is down over 5% while Raw Cotton is up over 5% and the rest were unchanged. Year over year, all prices is up slightly which 100% Polyester Fabric is up by 8.1% and Raw Cotton andNon-woven PP Fabric are both up over 4% in price versus one yearago.

asia manufacturing cost drivers 2018 Q2

CERAMIC AND GLASS RAW MATERIALS

In Ceramic Raw Materials, only Alumina’s price was down slightly, while in Glass Raw Materials Soda Ash was up in price over 15% and Glass Sand remain steady. Year over year, the trend of all price is up and the Soda Ash is up most (close to 26%) followed by Feldspar and Kaolin is up on average 14% and the rest up marginally versus one year ago.

asia manufacturing cost drivers 2018 Q2

FUEL

Fuel prices in China were generally going up in the range of 13% except for China Petroleum is remain steady in the second quarter, and year over year, most of fuels are up significantly high which is up on average 35% versus one year ago except for China Petroleum remained steady. Fuel is an important part of asia manufacturing cost.

OCEAN FREIGHT

Ocean freight rates went up sharply in Q2. Year over year, the average composite index of the WCI, is US $1,375/40ft container, which is $157 lower than the five-year average of $1,532/40ft container all adding to the Asia manufacturing cost.

COST OF LABOR

Most of Asian labor rates saw unchanged while only China labor is up by 5.2% in the second quarter adding to Asia manufacturing costs.  Year over year, rates are up in most countries with Indonesia up the most (over 7%) followed by Vietnam, Thailand and China are both up over 5% while Bangladesh saw no change. Cost of labor in India is down significant by 13.5% versus one year ago.

CURRENCY EXCHANGE RATE

For the second quarter, the USD strengthened slightly against the Chinese Yuan, Thai Baht, Bangladesh Taka, India Rupees, Indonesia Rupiah, Taiwan New Dollars and Vietnamese Dong with the Thai Baht, Chinese Yuan, India Rupees and Taiwan New Dollars stronger by over 5%. Year over year, the biggest gains for the USD are against the Indonesia Rupiah and India Rupees while its slightly weaker against the Chinese Yuan and Thai Baht adding to the overall Asia manufacturing cost.

CHINA TRADE (Data lags by one month)

China Imports was decreased by 7.31% while Exports was up by 1.83% in the latest three months. Year over year, China Exports are up by 2% and China Imports are down by over8%. The China Producer Price Index (PPI) is up slightly in the second quarter while the China Consumer Price Index (CPI) down slightly. Year over year, the China PPI is decreased slightly while the China CPI is up slightly versus one yearago.

PURCHASING MANAGERS INDEX (PMI)

Hong Kong PMI is down by over 8% and USA PMI is up slightly. Only China PMI is unchanged in the second quarter. Year over year, China PMI and Hong Kong PMI is down slightly with HK down by over 5% and USA PMI is up slightly versus one year ago.

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing cost drivers. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 30 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.   Our Asia manufacturing cost driver report is one example how we can add value and make your supply chain in Asia run more efficiently and consistently.

For additional details, please contact one of our Operations Specialists about Asia manufacturing cost.    If you have any suggestions about additions or changes to this report, we’d love your feedback. Thank you for your support.

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Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVER REPORT-2018 Q1

Category:Cost Drivers Report

ASIA MANUFACTURING COST DRIVER REPORT-2018 Q1

In the first quarter, there was a clear commodity price trends with most of raw materials in Asia going down in price. Many grades of plastics, steel, aluminum, paper, ceramic raw materials and other industrial metals went down in price while rubber and wood mostly rose in price. Textiles prices meanwhile remained mostly flat. Petroleum and fuel prices backed off their sharp increases and labor rates up in the lower wage counties. The US Dollar lost a little bit of ground against some of the Asian currencies in Q1. China Imports and Exports both saw significant decreases in the quarter and the China CPI was up slightly while the China PPI was down. Furthermore, PMI index remaining above 50 and signaling an expanding economy. Below is a chart of the general trends and for all the details, please see the entire report.

PLASTICS & RUBBER

Most of the General Purpose plastic resin prices were down in the first quarter with PE, PP, PVC, PS, Food Grade PP and HDPE down marginally and only EVA up in price by 1.5%. The others remained steady. Year over year, most plastic prices remain down in price versus one year ago.  PS is down the most (close to 10%) followed by PE and PP which are both go down in price by over 6%. PP is only GP resin which is up in price by 2.8% versus one year ago.

Engineering plastic resin prices were mixed in Q1 with ABS prices drop the most by 7.5% and PC and PU Foam down slightly, while the others were all up slowly. Year over year, POM is up a whopping 30% followed by PC up over 11% and ABS relatively increase a little, while PU Foam, PA6 and Nylon show a decreasing tendency versus one year ago.

In the Rubber category, prices were mixed in Q1. SCR5 and Latex finally saw a drop in price, down almost 13 %, while Silicon Rubber and EPDM were up in price by 10% and 9% respectively following by CR increase by 6%. NBR was the only one remained unchanged. Year over year, except for CR shoot up in price by 30%, EPDM is up by 5.9%. Polybutadiene Rubber, SCR5 and Latex are all up on average 30% and NBR by 10.7% versus one year ago.

METALS

For the first quarter of 2017, all grades of Carbon Steel were down in price with Steel Wire and Steel Rib were down over 15% and the others decrease marginally. Year over year, the trend is most grades of Carbon Steel go up in price with Hot Rolled Steel Plate up over 23% following by Hot Roll Steel Sheet and Tinplate up by 15% & 9.8%, and the rest are go up marginally. Steel Wire is exception with a slightly decrease in price.

In addition, all grades of Stainless Steel still continued their down in price in the first quarter between 0.6% – 5.8% with 410 grade down the most. Year over year, the trend is  mixed with 201 grade and 410 grade are go down in price by 11.5% and 6.3%, while the rest are go up on average 4.8% versus one year ago.

Moreover, all aluminum grades drop in price 3%-5.5% in the first quarter. And year over year, Aluminum 6061 go down in price by almost 17% and Aluminum down by 6.3%, while A00 and Aluminum 1060 are slightly higher in price.

And, in Other Industrial Metals, only Nickel’s price was up in Q1 while the rest of metals were down in price. Copper increased by 9.8% and Brass Tube decline 5%. Year over year, all the metals prices are increase with Zinc up sharply by over 31% and Nickel up over 16% versus one year ago.

 

WOOD, PAPER & TEXTILES

MDF increase by 9.5% in price and Beech Hardwood slightly higher in Q1 and the rest had no changed. Year over year all the prices are go up with MDF rise the most by over 24% and the others up slightly.

At the same time, Corrugated Board continued rise while the others saw a little change in the first quarter, all were relief on average 5.4%. Year over year, all paper prices remain higher, with Corrugated Board remaining up by almost 21% in price followed by Art Paper and  Kraft rise by 15.5% and 14.8% respectively. Gray and White Cardboard only go up marginally versus one year ago.

Most of Textile fabric prices were remained unchanged the first quarter. Except Polyester Fabric went up and Cotton went down slightly. Year over year, most prices are higher, with Polyester and PVC Leather up in price the most at 14% and 6.7% respectively and the rest up more modestly versus one year ago.

CERAMIC AND GLASS RAW MATERIALS

In Ceramic Raw Materials, Alumina prices down by 1.75% in the first quarter and Quartz, Kaolin and Feldspar remained unchanged, while in Glass Raw Materials Soda Ash was down in price sharply over 17% and Glass Sand marginally. Year over year, Feldspar is up in price by over 33%, followed by Kaolin up 10%, Alumina up 6.5% and Quartz up 5.3%, while Glass Grade Sand is lower by 21% and Soda Ash and Glaze both keep in price steady versus one year ago.

FUEL

Fuel prices in China were decline generally by 10%-24.7% in the first quarter and year over year, China Petroleum, LPG Gas and Natural Gas are decrease on average 10%. Furthermore, China Diesel Oil increase by almost 12% and China Industrial Electric has no change versus one year ago.

OCEAN FREIGHT

Ocean freight rates down sharply in Q1 with Shanghai/ Ningbo/Xiamen/Yantian to Chicago down over 30% on average and to Long Beach down over 49%. Year over year, Shanghai/ Ningbo/Xiamen/Yantian to Chicago are down by 29% on average and to Long Beach down over 55%.

COST OF LABOR

Asian labor rates saw increase trend in the first quarter except for China and Bangladesh remained unchanged. And for Thailand, Indonesia and Vietnam which jumped by 15%, 7.5& and 6% respectively. Year over year, rates are up in most countries with Thailand up the most (over 15%) followed by Indonesia (up 7.5%), Vietnam (up 6%) and China (5%) while Bangladesh saw no sign to change.

CURRENCY EXCHANGE RATE

For the first quarter, the USD strengthened slightly against the India Rupees, Indonesia Rupiah, Vietnam Dong and Bangladeshi Taka and weakened slightly against the China Yuan, Thai Baht and NT Dollars. Year over year, the biggest gains for the USD are against the Bangladesh Taka, Indonesia Rupiah, India Rupees and Vietnam Dong while its weaker against the Thai Baht, China Yuan and NT Dollar.

CHINA TRADE (Data lags by one month)

China Imports and Exports were both down significantly in the latest three months owing to the Lunar New Year holiday, down by 23.5% & 14.4% respectively. Year over year, China Exports are shoot up by almost 43% and China Imports are up by over 6.6% from year ago levels.

US Imports and Exports were both up slightly compared to last month.

Vietnam and Bangladesh Imports and Exports were both increased significantly with Vietnam Exports rose over 38% and Imports up over 35.4%, and Indonesia Exports up over 18% and Imports up by 20%. On the contrary, Indian and Indonesian Exports and Imports were all down compared to last month.

The China Producer Price Index (PPI) decrease by 2% in the first quarter while the China Consumer Price Index (CPI) rose by 1.2%. Year over year, the China PPI is down 3.8 % while the China CPI is up by over 2% versus one year ago.

PURCHASING MANAGERS INDEX (PMI)

PMI Indexes saw little change in the first quarter with Caixin China PMI Index has been climbing steadily throughout the quarter while China Federation of Logistics & Purchasing shows the higher index and USA PMI Index remained stable. But all were above 50 in Q1. Year-on-year, CFLP PMI Index is little lower. On the contrary, Caixin China PMI index and USA PMI show upward trends indicating growth and an expanding economy.

Download entire report: SI MANUFACTURING COST DRIVERS REPORT,2018Q1

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.

For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information.  Thank you for your support.

www.sourceint.com

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVER REPORT-2017 Q4

Category:Cost Drivers Report

ASIA MANUFACTURING COST DRIVER REPORT-2017 Q4

In the fourth quarter of 2017, most raw materials in Asia continued their upward movement in price.  Many grades of plastics, rubber, steel, other metals, wood, paper and ceramic raw materials all went up in price while aluminum and stainless steel and many grades of textiles moved down in price. Petroleum and fuel prices are all up in Q4 but Labor Rates and Ocean Freight rates both remained steady. The US Dollar lost a little bit of ground against most of the Asian currencies in Q4 about 1-3%. China imports and exports both saw significant increases in the quarter and, in addition, the China PPI and CPI and PMI indexes all saw a little drop in the final quarter of 2017.  The general trends are represented on our handy chart and for all the details, please download the entire report.

PLASTICS & RUBBER

For the fourth quarter of 2017, prices for the General Purpose plastic resin were mixed with PP, PS, PP(Food Grade) and TPE up slightly (1%~2.7%) and EVA up in price by 8.3%, PET Fiber up by 6.2%. Prices, however, for HDPE down over 10% and PE, HDPE and PVC+DOTP were down in price marginally (0.5%~1.7%). Only PET (SE-3030) remained unchanged in Q4. Year over year, most plastic prices remain down in price versus one year ago. PE is down the most (over 15%) followed by PP, PS, PVC and PET which are down in price by 9.5%~12.5%. While Food grade PP and HDPE are up in price by 8.3% and 9.8% respectively versus one year.

Meanwhile all grade of engineering plastic resin prices were increased in Q4 between 5% ~ 10% with POM up the most over 9%. Year over year, PC is up a whopping 30% followed by POM up over 20% and PA6 up over 16%. However, Nylon and PU Foam are down over 5% and 12% each versus one year ago.

In the Rubber category, most of prices were up in Q4 except BR was down over 11%. CR was up in price sharply over 12% followed by EPDM up over 9% while rest of rubber only up marginally (2%~3.9%). Year over year, prices are mixed with Latex see a huge drop in price, down over 43% and BR is also down sharply over 37%. Moreover, SCR5 and NBR are also down slightly. On the contrary, CR increases a lot in price almost 45% and EPDM only go up a little.

METALS

Prices for Carbon Steel were all went up in Q4. Cold Roll Steel Tube ascended the most over 20%, the rest of steel up marginally between 3.6% and 12.5%. Year over year, the trend is more even, Cold and Hot Roll Steel Tube shoot up by 64% and 50% respectively and Pig Iron up significant over 23% versus one year ago.

On the contrary, all grades of Stainless Steel were down slowly in price in the fourth quarter between 0.6% and 4% with 201 grade down the most. Year over year, all grade of Stainless Steel are drop in price (2%~16%) versus one year ago.

Furthermore, all aluminum grades grow down in Q4 as well. Aluminum 6061 decreased 21% followed by Aluminum 3003 down in price 13%. Besides, A00, Aluminum 1060, ADC12 and A380 also drop between 4.5%-9.6%. Year over year, most of prices are up, only Aluminum 6061 down in price 8%.

However, in Other Industrial Metals, only Zinc Alloy’s price was down in Q4 while the rest of the metals were up in price. Year over year, all the metals prices are up by over 24% on average with Brass Tube up the most (almost 46%) versus one year ago.

WOOD, PAPER & TEXTILES

Wood prices inched slightly higher in fourth quarter. Year over year the prices trend is same with Beech Hardwood up over 5.0% and the rest up slowly 8%-5%.

In Paper Materials, prices were mixed in Q4. White and Gray Cardboard and Art Paper continued their rise, increase 1.4%, 2.6% and 9.6% respectively. Corrugated prices finally saw some relief in Q4 and dropped over 22% also Kraft paper dropped marginally 1.4%. Year over year, all paper prices remain higher except Corrugated Board goes down a little. Art Paper remaining up by over 45% in price while all the others are on average by 8%.

Textile fabric prices were mixed in Q4. Raw Cotton, Polyester and 100% Cotton Fabric grew down in Q4. 50% Cotton 50% Polyester up slightly and the rest were unchanged. Year over year, all prices remain higher, with NonWoven PP up in price the most at 8.3% and the rest up more modestly at 0.4% to 5.3% versus one year ago.

CERAMIC AND GLASS RAW MATERIALS

In Ceramic Raw Materials, Kaolin and Feldspar increased by over 6% in the fourth quarter and Quartz was up slightly, while Alumina price was dropped in price sharply by 19.5%. In Glass Raw Materials Soda Ash drop 8% and Glass Grade Sand up a little. Year over year, Soda Ash up rapidly over 48%, Kaolin and Feldspar are both up in price by over 10%, Quartz and Glass Grade Sand up on average 4% while Alumina is lower by 2.7% and Glaze remains unchanged versus one year ago.

FUEL

Fuel prices in China were generally on the rise in the range of 13.5% in Q4 and year over year, all fuels are up in price by 14.1% to 15% except Diesel Oil is unchanged versus one year ago.

OCEAN FREIGHT

Ocean freight rates were unaltered in fourth quarter.

COST OF LABOR

Asian labor rates were not changed yet. Year over year, rates are up in most countries with Indonesia up the most (over 8%) followed by Vietnam (up 7%), China (up 5%) and Thailand (up 1.7%) while India and Bangladesh saw little to no significant change.

CURRENCY EXCHANGE RATE

For the fourth quarter, the USD strengthened slightly against the Bangladesh Taka and Indonesian Rupiah and weakened so slightly against the Chinese Yuan, India Rupees, NT Dollars and Thailand Baht (about 2%). Year over year, the biggest gains for the USD are against the Bangladesh Taka and Indonesian Rupiah while its weaker against the Thai Baht, NT Dollar, China RMB, Indian Rupee and Vietnam Dong.

CHINA TRADE (Data lags by one month)

China Imports and Exports were both up significantly in the latest three months, increased by 9.1% & 12.7% respectively. Year over year, China Imports and Exports are also up by 16.4% and 5%.

The China Producer Price Index (PPI) and China Consumer Price Index (CPI) were both dropped slightly in the fourth quarter. Year over year, the China PPI is up over 8% while the China CPI is down by 0.3% versus one year

PURCHASING MANAGERS INDEX (PMI)

All the PMI Indexes have been dropped throughout the quarter but all were above 50. Year- on-year, China Federation of Logistics and USA’s indexes show upward trends indicating growth and an expanding economy while HSBC’s indexes is drop by 0.7%.

Download entire report:

ASIA MANUFACTURING COST DRIVERS REPORT-2017-Q4

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.

For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information. Thank you for your support.

www.sourceint.com

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVER REPORT-Q3, 2017

Category:Cost Drivers Report

ASIA MANUFACTURING COST DRIVERS REPORT

Q3 – 2017 (July, August, September)

Tracking The Trends Which Drive Costs In Asian Manufacturing

PLASTICS & RUBBER

– Most of the General Purpose plastic resin prices were up in the third quarter. PVC and PVC+DOT price up by 23.3% & 18.8% respectively, and the others up in price on average about 7.7%. TPE and EVA were the exception with a marginally down in price. Year over year, most plastic prices remain up in price versus one year ago. HIPS is up the most (over 35%) followed by PP (food grade) and HDPE up over 28% & 13% respectively and the others up in price on average about 6% . PE is only GP resin which is down marginally in price versus one year ago.

– And most Engineering plastic resin prices were increase in Q3 with PA6+30%fb price up by 21.6% followed by POM and ABS (on average about 10%). PC and Nylon PA66 up in price slightly, while PU Foam was down by 4.5% and Nylon PA6 was unchanged. Year over year, ABS is up in price the most at 42% followed by PC, Nylon PA6 and POM all up significantly(on average 17%), while PU Form price is down by 4.5% versus one year ago.

cost drivers

– In the Rubber category, prices were mixed in Q3. Polybutadiene(BR) saw a huge increase in price, up over 26% and Silicon was also up over 7% followed by CR and Rubber up a little while SCR5, Latex, Foam Latex and Nitrile were down sharply (close to 10%). Year over year, CR is up significantly (over 58%) and BR, SCR5 and EPDM up slightly in price while Latex is down over 50%. Rubber and NBR are down by 12% & 4% respectively versus one year ago.

METALS

– Meanwhile prices for Carbon Steel were all increase with Pig Iron, Tinplate, Steel Wire and Hot Rolled Steels rose in price between 12% and 19%. And Cold Rolled Steels was up over 7%. Year over year, the trend is more even with all grades of Carbon Steel up double digits over 41% on average.

– In the Stainless Steel part, all grades of Stainless Steel were up in price in the first quarter between 5% – 23%. Year over year, the trend remains up with all grades of stainless up in price on average by over 24% versus one year ago.

– And all aluminum grades rose in price 6%-17% in the first quarter, and year over year, most of aluminum prices are up significantly between 9% and 14% and A00 is up sharply in price by over 25%.

– Besides, in Other Industrial Metals, all the metals were up in price by 3.5%-14.3%. Year over year, all the metals prices are up by over 26% on average with Zinc up the most (over 40%) versus one year ago.

 

WOOD, PAPER & TEXTILES

– Wood prices inched slightly higher in Q3. Year over year, except for MDF which is down in price by 3.3%, the rest of wood price are up slightly between 0.8% and 5.9%.

– At the same time, Kraft, Corrugated, White and Gray Cardboard continued their rise while Art Paper remained unchanged. Corrugated is up the most (almost 48%) followed by Kraft up over 20% and White & Gray Cardboard were up slightly. Year over year, all paper prices remain higher, with Corrugated Board remaining up by almost 88% in price while all the others are on average by 22%.

– Most textile fabric prices were up slightly in the third quarter except 100% Polyester Fabric price was up over 13%. Year over year, all prices are higher, with 100% Polyester Fabric and Raw Cotton up in price the most at 26% and 8.5% respectively and the rest up more modestly at 0.75% to 2% versus one year ago.

CERAMIC AND GLASS RAW MATERIALS

In Ceramic Raw Materials, Alumina price is up the most over 34% in the Q3 and the others only up slightly. And in Glass Raw Materials Soda Ash was up in price sharply over 42% and Glass Sand marginally. Year over year, Alumina increase rapidly in price by over 70%, followed by Feldspar (close to 12%), Soda Ash and Kaolin only up a little. And Glass Grade Sand is also increase sharply by over 56% and Quartz up marginally versus one year ago.

      

FUEL

In third quarter, Fuel prices in China were continue on the rise and year over year, all fuels are up in price significantly by 19% to over 44% versus one year ago.

OCEAN FREIGHT

Ocean freight rates saw little changes in Q3 which is typical and there is little change from one year ago. However, the fourth quarter is expected to be volatile with many carriers looking for price hikes as many of the primary freight contracts will be renegotiated in Q4.

COST OF LABOR

Asian labor rates remained unchanged in the Q3. Year over year, rates are up in most countries with Indonesia up the most (over 8%) followed by Vietnam (up 7%), China (up 5%) and Thailand (up 1.7%) while India and Bangladesh remained unchanged.

CURRENCY EXCHANGE RATE

For the first quarter, the USD strengthened slightly against the Bangladesh Taka and weakened ever so slightly against the Chinese Yuan and Vietnamese Dong with the Thai Baht, NT Dollar and Indian Rupee stronger by about 5%. Year over year, the biggest gains for the USD are against the China RMB, Bangladesh Taka, Vietnam Dong and Indonesia Rupiah while its slightly weaker against the Thai Baht, NT Dollar and Indian Rupee.

CHINA TRADE (Data lags by one month)

– China Imports and Exports were both up marginally in the latest three months up by 4.7% & 4.3% respectively. Year over year, China Imports and Exports are both up by 13% & 4.5% from year ago levels.

– The China Producer Price Index (PPI) rose 0.85% in the third quarter and the China Consumer Price Index (CPI) up a little by 0.3%. Year over year, the China PPI is up over 10% while the China CPI is down slightly by 0.2% versus one year ago.

PURCHASING MANAGERS INDEX (PMI)

All the PMI Indexes have been climbing steadily throughout the quarter and all were above 50 at the end of the quarter. Year-on-year, all indexes show upward trends indicating growth and an expanding economy.

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.

For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information.  Thank you for your support.

YOU CAN DOWNLOAD THE COMPLETE REPORT HERE

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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asia manufacturing cost drivers

ASIA MANUFACTURING COST DRIVERS REPORT-Q2, 2017

Category:Cost Drivers Report,Uncategorized Tags : 

ASIA MANUFACTURING COST DRIVERS REPORT

Q2 – 2017 (April, May, June)

Tracking The Trends Which Drive Costs In Asian Manufacturing

PLASTICS & RUBBER

  • All General Purpose plastic resin prices were down in the second quarter, PP(K8303), Food Grade PP, PE and PS down significantly (on average about 10.5%) and the others only down in price marginally. Year over year, PP(K8303) and Food Grade PP prices are down over 17% and 22% respectively, but most plastic prices remain up in price versus one year ago. HIPS is up the most (close to 25%) followed by PVC up 14% and HDPE up 7.5% and the others going down by small amounts.

  • Engineering plastic resin prices were more mixed with POM and PC prices up by 5% & 6% respectively, while Nylon, PA6 and PU Foam were down by 7% on average. Year over year, ABS is up in price the most at 35% followed by PC and PA6 up over 20% and the others only up in prices marginally while POM is the only grade which remains unchanged in price versus one year

cost drivers

  • Most of the Rubber prices were down in Q2, BR saw a huge drop in price, down over 35% and SCR5, Latex, EPDM prices all down over 10% and NBR down a little. CR is the only one which was up in price (close to 6%).Year over year, except for Latex which is lower in price over 51%, CR price is up over 53% and BR, SCR5, NBR are all up on average 15 % and EPDM up over 3% versus one year.

cost drivers

METALS

  • For the second quarter of 2017, prices for Carbon Steel were mixed, with Pig Iron and Cold Rolled Steel Plate down an average of 13% and Tinplate and Cold Roll Steel Sheet down an average of 4.4%. Prices, however, for Hot Roll Tubes and Cold Roll Steel Tube were up in price by over 18% while Hot Roll Steel Sheet and Steel Wire were up a little. Year over year, the trend is more even with all grades of Carbon Steel up double digits over 44% on

  • In the Stainless Steel part, most grades were down in price between 5% – 16% with 201 grade down the most while 202 grade up a little in the second quarter. Year over year, the trend remains up with most grades of stainless steel up in price on average about 11% versus one year ago. Except for 304 grade down close to 15%.

  • Most aluminum grades rose in price 0.6% in the second quarter while ADC12 and A3380 were down close to 2%, and year over year, most prices are up between 3 and 7% while A380 is down over 2%.

  • In Other Industrial Metals, only Brass Tube’s price was down in Q2 while Nickel and Zinc was down by 8% &3% and the rest of metals were down marginally. Year over year, most metals prices are up over 20% except Nickel’s price is down slightly versus one year

WOOD, PAPER & TEXTILES

  • Wood prices inched slightly lower in Q2 except Beech which was up 3%. Year over year, Beech’s price up over 7% and the others only up

  • Meanwhile all grades of Paper Materials were up in price in the second quarter with Art Paper up in price by 13% followed by Gray Cardboard and White Cardboard up by 4%&5% respectively and the rest up in price marginally. Year over year, all paper prices remain higher, with Art Paper remaining up by almost 26% in price while Gray and White Cardboard are up almost 19%&15% and the others are on average by 2%.

  • Textile fabric prices saw little change in the second quarter with Raw Cotton, 100% Cotton Fabric and Poly/Cotton Fabric up slightly and the rest were unchanged. Year over year, all prices are higher, with Raw Cotton and 100% Polyester Fabric PP up in price the most at 21% and 13% respectively and the rest up slightly versus one year

 

textiles

CERAMIC AND GLASS RAW MATERIALS

In Ceramic Raw Materials, only Alumina prices was up slightly, while in Glass Raw Materials Soda Ash was down in price over 7% and Glass Sand marginally. Year over year, Alumina is up in price by over 32%, followed by Feldspar and Kaolin up 7%&2%, while Glass Grade Sand is lower over 15% and Quartz down in price marginally versus one year ago.

ceramicsglass raw materials

 

FUEL

Fuel prices in China were generally going down in the range of 21% in the second quarter and year over year, all fuels are up in price with Industrial Electric up significantly over 21% followed by Natural Gas and LPG Gas up on average 7% versus one year ago.

OCEAN FREIGHT 

Ocean freight rates haven’t been updated yet in Q2.

COST OF LABOR

Asian labor rates saw little change in the second quarter with China Labor up almost 5% and the rest remained unchanged. Year over year, rates are up in most countries with India up the most (over 9%) followed by Indonesia (up 8%), Vietnam (up 7%), China (up 5%) and Thailand (up 1.6%) while Bangladesh saw little to no significant change.

CURRENCY EXCHANGE RATE

For the first quarter, the USD strengthened slightly against the Bangladesh Taka and weakened ever so slightly against the Chinese Yuan and Vietnamese Dong with the Thai Baht, NT Dollar and Indian Rupee stronger by about 5%. Year over year, the biggest gains for the USD are against the China RMB, Bangladesh Taka, Vietnam Dong and Indonesia Rupiah while its slightly weaker against the Thai Baht, NT Dollar and Indian Rupee.

CHINA TRADE (Data lags by one month)

  • China Imports and Exports were both up significantly by 16% & 59% respectively in the latest three months. Year over year, China Exports are up by almost 14% and China Imports are up by over 5%.
  • The China Producer Price Index (PPI) gone down 2% in the second quarter while the China Consumer Price Index (CPI) rose slightly. Year over year, the China PPI is up over 8% while the China CPI is down slightly versus one year

PURCHASING MANAGERS INDEX (PMI)

All the PMI Indexes have been climbing steadily throughout the quarter and all were above 50 at the end of the quarter. Year-on-year, all indexes show upward trends indicating growth and an expanding economy.

CONTACT US FOR MORE  INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.

For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information.   Thank you for your support.

www.sourceint.com

 

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVERS REPORT – Q1 2017

Category:Cost Drivers Report

There were no clear commodity price trends in the first quarter with some raw materials in Asia going down in price while some continuing on their upward price trend begun in the fourth quarter of 2016.  Many grades of plastics, rubber, steel, paper and ceramic raw materials went down in price while aluminum, other industrial metals, and glass raw materials mostly rose in price. Wood and textiles prices meanwhile remained mostly flat. Petroleum and fuel prices backed off their sharp 2016 increases and labor rates inched up in the lower wage counties. The US Dollar lost a little bit of ground against most of the Asian currencies in Q1 while ocean freight rates showed little change. China imports and exports both saw significant decreases in the quarter and the China PPI was up slightly while the China CPI was down. One very bullish sign is that all the PMI indexes saw steady improvement in Q1, remaining above 50 and signaling an expanding economy. Below is a chart of the general trends and for all the details, please see the entire report.

ASIA MANUFACTURING COST DRIVERS REPORT – Q1 2017

PLASTICS & RUBBER

– Most of the General Purpose plastic resin prices were down in the first quarter with PP, PE, PVC, PS and PET down significantly (on average about 10%) and the others only down in price marginally.  HDPE was the exception with a significant increase in price of a little over 8%.  Year over year, most plastic prices remain up in price versus one year ago.  PVC is up the most (close to 20%) followed by HIPS up over 19% and PS and PET which are up in price by over 8% each. Food grade PP is only GP resin which is down in price (almost 12%) versus one year ago.

– Engineering plastic resin prices were more mixed with PC and PA6 prices up by 15% & 25% respectively, while ABS, POM, Nylon and PU were down by 4% on average. Year over year, ABS is up in price the most at 36% followed by Nylon PA6, Nylon PA66, Nylon all up over 10% while POM is the only grade which remains unchanged in price versus one year ago.

– In the Rubber category, prices were mixed in Q1. Latex saw a huge drop in price, down over 28% and BR was also down sharply over 13% while CR was up 17%, followed by SCR5 up 16%, NBR up almost 10% and finally EPDM up a little over 6%. Year over year, except for Latex which is lower in price by 47%, CR, SCR5 and BR are all up on average 50% and NBR and EDPM were up the least on average by 6% versus one year ago.

METALS

– For the first quarter of 2017, prices for Carbon Steel were mixed, with Cold Rolled and Hot Rolled Steels down an average of 7% and Steel Wire down by almost 3%. Prices, however, for Cold Rolled and Hot Rolled Tubes were up in price by over 2% while Pig Iron was up almost 8%. Year over year, the trend is more even with all grades of Carbon Steel up double digits over 53% on average.

– Meanwhile all grades of Stainless Steel were down in price in the first quarter between 3% – 12% with 304 grade down the most.  Year over year, the trend remains up with all grades of stainless up in price on average by over 29% versus one year ago.

– On the contrary, all aluminum grades rose in price 4%-8% in the first quarter, and year over year, all prices are up significantly between 10% and 20%.

– And, in Other Industrial Metals, only Nickel’s price was down in Q1 while rest of the metals were up in price by 7%-14%. Year over year, all the metals prices are up by over 34% on average with Zinc up the most (over 60%) versus one year ago.

 

WOOD, PAPER & TEXTILES

– Wood prices inched slightly higher in Q1 except MDF which was down 5%. Year over year the prices trend is same with MDF down 5.0% and the rest up slightly 1%-4%.

– Corrugated prices finally saw some relief in Q1 and dropped almost 16% following the second half 2016 run-up.  White and Gray Cardboard and Art Paper continued their rise, up on average by another 15% while Kraft paper dropped almost 8%. Year over year, all paper prices remain higher, with Corrugated Board remaining up by almost 30% in price while all the others are on average by 15%.

– Textile fabric prices saw little change in the first quarter with Raw Cotton up 1%, Polyester down 5% and the rest were unchanged. Year over year, all prices are higher, with Raw Cotton and NonWoven PP up in price the most at 30% and 14% respectively and the rest up more modestly at 2% to 7% versus one year ago.

CERAMIC AND GLASS RAW MATERIALS

In Ceramic Raw Materials, Alumina prices backed down by over 10% in the first quarter and Quartz and Glaze were down slightly, while in Glass Raw Materials Soda Ash was up in price sharply by 23% and Glass Sand marginally. Year over year, Alumina is up in price by over 33%, followed by Soda Ash up 31%, Feldspar up 7% and Kaolin up 3%, while Glass Grade Sand is lower by 21% and Quartz and Glaze both down in price marginally versus one year ago.

FUEL

Fuel prices in China were generally on the rise in the range of 8% in the first quarter and year over year, all fuels are up in price significantly by 6% to over 50% versus one year ago.

OCEAN FREIGHT

Ocean freight rates saw little changes in Q1 which is typical and there is little change from one year ago. However, the second quarter is expected to be volatile with many carriers looking for price hikes as many of the primary freight contracts will be renegotiated in Q2.

COST OF LABOR

Asian labor rates saw little change in the first quarter except for Indonesia, Vietnam and Thailand which jumped by 8%, 7% & 2% respectively. Year over year, rates are up in most countries with India up the most (over 9%) followed by Indonesia (up 8%), Vietnam (up 7%) and Thailand (up 1.7%) while China and Bangladesh saw little to no significant change.

CURRENCY EXCHANGE RATE

For the first quarter, the USD strengthened slightly against the Bangladesh Taka and weakened ever so slightly against the Chinese Yuan and Vietnamese Dong with the Thai Baht, NT Dollar and Indian Rupee stronger by about 5%. Year over year, the biggest gains for the USD are against the China RMB, Bangladesh Taka, Vietnam Dong and Indonesia Rupiah while its slightly weaker against the Thai Baht, NT Dollar and Indian Rupee.

CHINA TRADE (Data lags by one month)

– China Imports and Exports were both down significantly in the latest three months owing to the Lunar New Year holiday, down by 15% & 39% respectively. Year over year, China Exports are down by almost 5% while China Imports are up by over 38% from year ago levels.

– The China Producer Price Index (PPI) rose over 4% in the first quarter while the China Consumer Price Index (CPI) decreased by almost 2%. Year over year, the China PPI is up over 13% while the China CPI is down by almost 2% versus one year ago.

PURCHASING MANAGERS INDEX (PMI)

All the PMI Indexes have been climbing steadily throughout the quarter and all were above 50 at the end of the quarter. Year-on-year, all indexes show upward trends indicating growth and an expanding economy.

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices and website to learn more about us.

For additional details, please refer to the charts that follow or contact one of our Operations Specialists for more information.  Thank you for your support.
DOWNLOAD THE ENTIRE REPORT

 

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighed against other sources and experts on the individual topics covered and\, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


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ASIA MANUFACTURING COST DRIVERS REPORT – Q4 2016

Category:Cost Drivers Report

Asia Manufacturing Cost Drivers were all on the rise in Q4 of 2016. It had to come eventually and the fourth quarter of 2016 certainly took the year out with a bang! Practically all raw materials tracked were on the rise with many showing the most significant increases in several years. Plastics, rubber, steel, brass, copper, nickel, corrugated paper, textiles, and ceramics prices were all up sharply (more than 10%), while wood and a few grades of aluminum, textiles were up only moderately (less than 10%). A few grades of aluminum, paper and ceramic/glass materials actually went down in price but they were few and far between. Petroleum products and fuels all rose sharply while labor rates were unchanged. The US Dollar was especially strong and appreciated against all of the Asian currencies. China imports and exports saw strong gains in the quarter and the China PPI and CPI were both up. And, lastly, all of the PMI indexes showed strength remaining well above 50 signaling an expanding economy in both Asia and the USA. See the chart of the general trends with green lights indicating positive trends, red lights indicating negative trends and yellow lights indicating caution relative to manufacturing costs. For all the details, please see the complete report, which follows.

manufacturing cost drivers

ASIA MANUFACTURING COST DRIVERS REPORT – Q4 – 2016

PLASTICS & RUBBER

manufacturing cost drivers

General Purpose plastic resin prices were all up significantly in the fourth quarter on average by over 15% lead by HIPS (+29%), PS (+21%) and PET (+18%). Year over year, all GP resins are up in price with HIPS and PS up the most (+54%) followed by PP and PVC both up over 40%. PE, HDPE, Food Grade PP and PET are up the least at 28%, 11%, 7%, and 4% respectively versus one year ago.

manufacturing cost drivers

Engineering plastic resin prices saw more modest increases in the fourth quarter with Nylon (PA66) up 15%, PU Foam up 10%, POM up 6%, and Nylon PA6 up 3% while ABS was up a whopping 38%. PC bucked the upward trend and actually went down in price by 4%. Year over year, ABS is up 67%, Nylon PA66 is up 24%, PU foam up 10% followed by POM up 6% and PC up 5%. Only Nylon PA6 is down in price (22%) versus one year ago.

manufacturing cost drivers

Rubber pries also rose in the fourth quarter as Polybutadiene (BR) Rubber took another huge jump up 42% more on top of the 29% increase in the third quarter. Natural Rubber and Neoprene (CR) were also up sharply by 17% and 23% respectively while EPDM rose 7%. Only Latex was down in price (11%). Year over year, rubber prices are mixed with BR (+120%), Neoprene (+24%), and Natural Rubber (+12%) all up in price while Latex (-34%), EPDM (-13%), and NBR (-5%) are down in price versus one year ago

METALS

manufacturing cost drivers

In the fourth quarter of 2016, Carbon Steel prices rose sharply again another 30% or more on top of significant third quarter gains. Year over year, the trend is more pronounced with increases from 64%-98% versus year ago levels with Pig Iron up in price by 55%

manufacturing cost drivers

All grades of Stainless Steel were also up in price in the fourth quarter between 24% and 38%. Year over year, the trend is also up with all grades up in price on average by 47% versus one year ago.

manufacturing cost drivers

Aluminum grades on the other hand were the rare fourth quarter exception with prices actually dropping on average 5% in most cases with the exception of A00 Ingots, which rose 2%. Year over year prices, however, remain up on average by about 10% versus one year ago.

manufacturing cost drivers

-Industrial Metals rose across the board in October and November before backing off in December with Brass, Copper, and Zinc ending the quarter up sharply by 15%, 17% and 11% respectively while Nickel saw a more moderate 3% increase. Year over year, all are well above year ago levels including Zinc up 48%, Nickel up 24%, Copper up 22% and Brass up 13% versus one year ago.

WOOD, PAPER & TEXTILES

manufacturing cost drivers

Wood prices edged up 1% to 2% on average, which was the first increase this year.

manufacturing cost drivers

Corrugated took a huge jump in the period up 50% and Kraft paper rose 10%. White and grey cardboard were slightly lower by 3%-4% and art paper was unchanged. Year over year, Corrugated is up 55%, Kraft up 10%, Art Paper 2% and both white and grey cardboard are both equal with year ago prices.

manufacturing cost drivers

Textile prices also saw sharp increases with Polyester fabric up 18%, Nonwoven PP up 9%, T/C fabric up 5% and Cotton up only 1%. Year over year, all prices are higher except polyester which remains down in price by 24% versus one year ago.

GLASS & CERAMIC RAW MATERIALS
manufacturing cost driversmanufacturing cost drivers

Alumina prices jumped another 41% in the fourth quarter after registering a 9% increase in the third quarter. Feldspar and Kaolin were also up in price by 7% and 3% respectively while quartz and glaze saw no change in prices. On the positive side, Soda Ash and Sand were down in price by 3% in the quarter. Year over year, Alumina is now up 78%, Feldspar and Soda Ash are both up 7% and Kaolin is up 3% while conversely Sand is down in price by 21% and Glaze is down by 2% versus one year ago.

FUEL

Fuel prices rose sharply in the fourth quarter by 30%-45% while year over year, fuel prices are up an average of 13%.

OCEAN FREIGHT

Ocean freight was one of the few items that saw no change in the fourth quarter, although our inside information says that some carriers got about 3% increase on contract renewals in the fourth quarter. Year over year, rates remain at historic lows 22%-43% below year ago levels. All indications, however, point to increases in 2017 after nearly 2 years of steady decreases to the current unsustainable levels.

COST OF LABOR

Asia labor rates saw no change in the fourth quarter and year over year, rates are up in most countries with Indonesia up the most (22%) followed by India and Vietnam (15%), and China (3%) while Bangladesh & Thailand stayed even.

CURRENCY EXCHANGE RATE

The USD gained strength in the fourth quarter appreciating 4% over the China Yuan, Taiwan Dollar, Indonesia Rupiah, and Thai Baht; 2% over the Vietnam Dong, and India Rupee and 1% versus the Bangladesh Taka. Year over year, the biggest gains for the USD are against the China Yuan (7%), India Rupee (3%), and Vietnam Dong (3%) while it was weaker against the Thai Baht (1%), Taiwan Dollar (1%), and Indonesia Rupiah (2%).

CHINA TRADE (Data lags by one month)

– China Imports and Exports were both up strongly in the three months ending in December, 10% and 3% respectively. Year over year, China Exports still remain down a fraction while China Import are up 6% from year ago levels.

– The China Producer Price Index (PPI) jumped 4.1% in the quarter while the China Consumer Price Index increased by 1%. Year over year, the China PPI is now up 10% for the year while the China CPI remains 1% above one year ago.

PURCHASING MANAGERS INDEX (PMI)

All of the PMI Indexes have been climbing steadily throughout the quarter and all were above 50 at year end. Year-on-year, all indexes continue to show upward trends indicating growth and an expanding economy.

FORWARD LOOKING ANALYSIS

2017 is shaping up to be a very interesting year for Asian manufacturing. The election of Donald Trump has lead to uncertainly as to the impact that his administration might have on global trade. Trump’s vague agenda in regards to USA infrastructure building, foreign trade restrictions and his populist agenda signal the basis for a continued strong dollar, inflationary pressures and a shakeup of foreign trade relations. The jury is still out and despite all the pre-election rhetoric, global economies could go either way, depending on how political momentum shifts in the Eurozone and which areas the Trump administration addresses first.

Key factors that are likely to impact commodity prices in 2017 include OPEC’s actions on oil supply, demand for Chinese goods and the overall global political climate. China saw somewhat of a manufacturing recovery through Q4 of 2016 with stronger than expected exports to Vietnam, Cambodia and Bangladesh. The India, Pakistan, Turkey and Indonesia economies were weaker and continued to suffer with currency and inflation issues. Ongoing themes include fluctuation in the global manufacturing and sourcing climate, rising labor costs, volatile oil and commodity prices, e-commerce and technological advancements in the supply chain combined with the massive consolidation in the container shipping industry, the geopolitical effect of the recent Brexit vote and the rise of ‘populist’ movements in the west are all significant impacts on global trade. As always, there is an increasing push for shorter lead times and lower prices. The status of major trade agreements such as the Trans-Pacific Partnership and NAFTA combined with geopolitical uncertainty, changing demographics, rapid technological advances, the rise of e-commerce, a lack of workers in China, volatile currencies, and increasing corporate social responsibility demands all lead to uncertainty in 2017. We’ll have to wait until Trump’s inauguration and the passing of the Lunar New Year holiday to get a better grasp on what the year will be looking like.

As of Q4, 2016, OPEC countries tentatively agreed to reduce oil supply by 2 million barrels per day in an effort to raise prices, which rose above the $40 per barrel range in the fourth quarter. Predictions are for relatively stable oil prices throughout the first half of 2017 though which should lead to more stable plastic and synthetic fabric prices (such as polyester), however, a lot depends on demand and production capacity.

Global rubber prices surged by close to 50% in the final quarter of 2016, mostly based on higher crude oil prices. This increase is prompting manufacturers to raise prices on both synthetic and natural rubber products, a trend which should continue into 2017.

Metal prices rallied through Q4 supported by a firm U.S. dollar and optimistic economic outlook. While the overall sentiment is bullish, volatility is expected into Q1 with uncertainty about the USA economic policy.

World cotton production and prices rose in 2016, which may put pressure on prices in 2H 2017, especially in light of increased China stockpiles. Wool prices ended 2016, with a 28% surge, a trend expected to continue through 2017. Leather prices also trended sharply up in late Q4 on the back of strong demand.

Excerpts from the Asia Inspection (AI) Q1 Barometer report provide additional insights:

  • “After several slow quarters in the wake of increasing working costs and strong currency, China picked up pace again in 2016 (+12.5% YoY). It even outpaced some of its declared challengers, as Vietnam saw a more modest +5% growth, and Thailand was flat YoY. South of Asia continues to grow as a manufacturing powerhouse, especially for the Textile industry, as India and Pakistan saw audits and inspection volumes surge respectively +30.5% and +18.2% in 2016.
  • “Overall, 2016 has seen a deterioration in manufacturing quality for consumer products worldwide: AI failure rate for product inspections in factories has grown by +8.8% in 2016 vs. 2015, with 35.8% of all inspections returning beyond acceptable level of defects.
  • “Contrasting with the degrading manufacturing quality levels in factory, 2016 has seen rather promising results on product safety and performance testing in lab: AI lab tests failure rates overall have decreased by -11.4% in 2016, with 3.3% of all tests failing. It would appear that while brands and manufacturers have gotten better at properly designing and conceiving their products to comply with international standards, it is when mass production starts that most quality issues arise. Furthermore, a look past this overall encouraging figure for lab test results shows a more disparate reality. For instance, as demand for REACH-related testing in the EU has skyrocketed this year, test results have not been that good, with failure rates tripling YoY. The highest failure rates are found around phthalates testing, with as much as 5.4% tests not meeting safety requirements, indicating potentially harmful products.”
  • “The state of structural safety remains troubling as 63% of factories audited in 2016 by AI were found in need of remediation, while the number of compliant factories has gone down from 41% in 2015 to 37%. Critical issues were found in 3% of factories, a slight improvement compared to the previous year. Meanwhile, ethical compliance continues presenting challenges: data collected from AI’s ethical audits during 2016 shows that a third of factories only were found compliant. While the number of critically non-compliant suppliers decreased (27% in 2016 vs. 41% in 2015), a large portion of suppliers are still ranked as “Amber”, indicating the need for improvement in the medium and long term. Among the top concerns in ethical compliance are a range of labor violations, including forced overtime, sexual harassment, child labor, forced labor, and exploitation of refugees. Environmental compliance was also uneven throughout global supply chains in 2016. According to AI data, over 36% of audits failed this year, a 5% increase from 2015. Overall, many brands are not prepared to make a commitment for ISO 14001 compliance right out of the gate, instead choosing to aim for the minimum legal standards applicable in their sourcing country. Nevertheless, more companies are committing to sustainability objectives in both short and long term, setting objectives for 2020 and beyond.”

CONTACT US FOR MORE INFORMATION

Thank you for taking the time to follow trends in Asia manufacturing. We’ll continue to provide objective reporting of the Asian Manufacturing Cost Drivers so you as supply professionals can make informed decisions for your companies.

Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management and manufacturing in Asia. We have a 25-year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff and welcome the opportunity to show you how we can add value to your supply chain in Asia. Please take time to visit our offices and website to learn more about us. For additional details, please refer to the charts that are attached or contact one of our Operations Specialists for more information. www.sourceint.com

2016 Q4 COST DRIVERS REPORT DOWNLOAD

Data for this report comes from the sources listed and while every attempt is made to be as comprehensive and accurate as possible, please consider that these are just general trends and you should not draw any specific conclusions from the data. We recommend that any information provided in this report be weighted against other sources and experts on the individual topics covered and, accordingly, we make no specific claims nor assume any liability from the use of the data contained herein.


Who We Are

Source International has operational offices in Louisville, Kentucky & Xiamen, China. Our passion is to partner with companies in supply management from Asia. We have a 25 year on-the-ground track record, a rigorous operating procedure, and a very well trained local staff. We welcome the opportunity to show you how we can add value to your supply chain in Asia and invite you to visit our offices to understand better our procedures & the scale of our operations.

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