ASIA MANUFACTURING COST DRIVERS REPORT Q4
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.
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.
– 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 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.
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.
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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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