Manufacturing Cost Report For Second Quarter 2020

 
The commodity price trends in the second quarter are mixed in Asia. Some grades of Plastics and Rubber were down in price while some grades were up or maintained the price. Steel, Alum, Metals and Freight were mostly up in prices. Paper and Fuel were mostly down in price. Wood, Textiles and Ceramics were mostly flat in price, and labor rates were steady in the lower wage countries. The trend for World Container Index was increased in Q2. The US Dollar was slightly down of the Asian currencies in Q2. Affected by Covid-19 in the world, China imports declined in this quarter, while exports increased faintly than Q1. The China CPI and PPI were slightly down. The China PMI indexes kept flat in Q2 and the US PMI was obviously up in June in Q2.

PLASTICS & RUBBER

Most General plastic prices were down in April, but bounced back in May and June. Especially PP (k8303) was up 14.3%, PE (LD400) was up 11.3%, and PP (Food Grade) was up 10.3%. Year over year, most of the general plastic prices are down on the average of 10.75%, PS (688B) is decreased over 25%, HDPE is decreased 16.3% versus one year ago.

Some of engineering plastic prices were down in the Second quarter. Nylon (PA66) /PC (L-1250Y) decreased 6.5%. However, ABS (PA-757K) increased 5.8%, while PU Foam (Density <30) was unchanged. Year over year, PC (L-1250Y) is down 13.6%, following is Nylon (PA66) down 9.1%.

Some of the Rubber prices were down in Q2, EPDM Rubber was down 5%, and Polybutadiene Rubber (BR9000) was down 1.2%. Conversely, Natural Rubber (SCR5) increased 3.1%. Year over year, Most of rubber prices are down, average is down 10%.

METALS

For the second quarter of 2020, the prices for most of Carbon Steel were up. Hot Rolled Steel Plate increased 7.2%, Cold Roll Steel Sheet was up 4.2% and Steel Wire was up slightly by 0.8%. Pig Iron was steady. Year over year, most of carbon steels in price are down on the average 3.6% versus one year ago.

In the Stainless Steel part, all of the grades of prices were up in the second quarter, with 410 increased 10.4%, 304 up 6.1%, and 201 up 2.8%. Conversely, 420 and 430 decreased 3.4%. Year over year, most of the Stainless Steel prices are down, with 201 prices sharply down over 12.9%, and 430 down 11.9%, average 5.1% down versus one year ago.

The aluminum prices were up on the average of 12.4% in the second quarter, with Aluminum Ingots (A00) up over 20%. Year over year, all aluminum prices increase slightly with average 0.8% versus one year ago.

In other Industrial Metals, the trend was up in Q2, average up 18.7%, especially, Brass Rod was up 31.6%, and Copper increased 25.1%. Year over year, only Zinc Alloy is down 18.7% versus one year ago.

WOOD, PAPER & TEXTILES

Wood prices were steady and unchanged in Q2, only Beech was down 2.8%. Year over year, most of wood prices are slightly down by average 0.9% versus one year ago.

Most of the prices of Paper Materials were down by average 6.5%, only Kraft Paper kept steady. Gray Cardboard was down 9.0%. Year over Year, the trend of paper price is down, too, by average 6.2%. Gray Cardboard is down 10.6% versus one year ago.

Textile fabric prices were mostly unchanged in the second quarter, except Raw Cotton in price was up 5.3%. Conversely, 100% Polyester Fabric decreased by 5.6%. Meanwhile, year over year, most of Textile prices keep steady, while Raw Cotton and 100% Polyester Fabric are down 15.5% & 10.5% respectively versus one year ago.

CERAMIC AND GLASS RAW MATERIALS

In Ceramic and Glass Raw Materials, most of the materials were unchanged in Q2, However, Soda Ash obviously dropped 20.6%, and followed by Alumina in price were down 5.9%. Year over year, Soda Ash and Alumina are down 32.5% & 29.6% respectively versus one year ago.

FUEL

Fuel prices in China were sharply decreased, with Petroleum Price and Natural Gas prices were obviously down 29% and 11% in the second quarter. Diesel Oil increased slightly by 1.8%. Industrial Electric was unchanged. Similarly, year over year, the trend for the grades are down in price, with Petroleum Price in price is largely down to 43.2%, followed by Natural Gas price declined 26.6% versus one year ago.

OCEAN FREIGHT

The World Container Index was up 17.6% in the second quarter. Year over year, the World Container Index is up 39% versus one year ago.

COST OF LABOR

Most of the Asian labor rates were unchanged in Q2. Similarly, year over year, rates are mostly keeping steady. Vietnam and Thailand prices are up 5.7% & 1.8% respectively.

CURRENCY EXCHANGE RATE

For the second quarter, the USD weakened against the Indonesian Rupiah by 12.3% and Thailand Baht by 5.28%. The USD strengthened slightly against Bangladesh Taka. Year over year, the USD strengthen against most of the Asian countries, except Taiwan New Dollars, Vietnam Dong and Japanese Yen.

CHINA TRADE (Data lags by one month)

China Imports was down 4%. Conversely, China Exports was up 41.22% in the second quarter. Year over year, China Imports obviously decrease 19.93% and Exports are down 3.27% versus one year ago.

The China Consumer Price Index (CPI) and China Producer Price Index (PPI) were all down by average 3% in the second quarter. Year over year, the China CPI is down marginally and China PPI is down 4.3% versus one year ago.

PURCHASING MANAGERS INDEX (PMI)

The PMI China was down 2.12%, PMI Hong Kong was up 2.2%. PMI US was up obviously by 7.13% in Q2, with June increased 22.04% than May. Year over year, both PMI China and Hong Kong are up above 3%, PMI US is up 1.74% 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 27 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.

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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.