Asia Manufacturing Cost Drivers – 2/16

Asia Manufacturing Cost Drivers – February, 2016


General Purpose Plastic resin prices were mixed in February with General Purpose PS & High Impact PS up sharply in price by over 11% while HDPE & PET conversely moved down by 6% & 4% respectively.  Meanwhile, most other GP resins prices were unchanged. Year-over-year, most prices are still significantly lower on average by over 14% with the exception of PET which is even with year ago price, and PVC is up in price slightly.

Engineering Grade Plastic prices also were mixed but less volatile. PA6 was down by another 2% while Nylon moved up in price by 2% with the rest unchanged. Year-over-year price almost all engineering resins are down in price on average by over 10%, except PC which is up slightly and ABS which is equal to year ago.

Most Rubber prices continued favorable trends in February, with the exception of Synthetic Rubber, bucking the trend, up in price sharply by over 12%, while the rest were down on average by over 3% and all prices remain well below last year’s levels by 17%-40%.

Carbon Steel prices jumped in February, with Hot Rolled Steel and Steel Wire up almost 10% while Cold Rolled prices were mostly flat. With Pig Iron down over 6% though, it is believed that the hike in Hot Rolled Steel will be temporary. Year over year, all prices saw significant movements down by over 27% on average.

Stainless Steel prices were stable in February, with 430 grade moving up slightly, 304 grade down by a fraction while other grades remained unchanged. Year-over-year stainless prices are lower by over 14% on average except stainless steel 410 grade which is higher by over 12% compared with one year ago.

Aluminum prices reversed the recent downward trends, with prices moving up in February by 3% on average across the board.  Year-over-year most prices remain lower on average by 16% with the exception of Aluminum 6061 which is now priced close to 26% above one year ago.

In other metals, Brass & Nickel were down in price in February by about 2%, while Zinc jumped by 6% and Copper was up only fractionally. Year-over-year, Brass, Copper & Nickel all remain well below last year’s levels by over 25% on average, with the exception of Zinc, which is higher by 2% versus one year ago.

Wood prices remained unchanged in February and remain about 2% lower than year ago prices, although MDF board is back to even with year ago.

Prices for Paper stocks were unchanged almost in February, except Corrugated, which was up by 1%. Year-over-year, prices were higher by 3% on average.

Textile Fabrics were mostly flat except Polyester which was down sharply by over 12%.  Year-over-year, all textiles prices are lower by about 8% on average.

Except Alumina which moved up in price by over 10% the rest of Ceramics Raw Materials prices were flat in February. Year over year, Feldspar, Kaolin & Alumina Quartz are down by 2%, 3% and 30% respectively, while Quartz bucks the trend, up by over 10% versus one year ago.


In Asian labor rates, the Thailand and Bangladesh labor rates were unchanged in February and year-over-year, while China Labor rates were stable in February but up over 8% versus one year ago.

All fuel prices moved significantly lower in February, following  January’s favorable trends, down another 10% on average. Year-over-year, likewise, all prices are significantly lower in price on average by over 25%.

Ocean Freight rates also moved lower in February, down over 6% to the west coast and 14% to the east coast, however several carriers were threatening a GRI in March. Year-over-year freight rates from China ports are down over 21% to the west coast and 42% to the east coast.

As for Asian Currencies, most Asian Currencies showed some strength in February,strengthened slightly against the US Dollar except the India Rupee & Vietnam Dong which were weaker by a fraction. Year-over-year, all Asian Currencies were weaker against the US Dollar by over 6% on average.


Both China PMI indexes signaled a further contracting economy in February, with both the China and Hong Kong indexes down while the USA Purchasing Managers Index moved fractional positive from 48.2 to 49.5.  Important to note is that all indexes remain below 50 signaling contracting economies.

Also, both China Imports & Exports decreased by another 30% & 20% respectively effected by arrival of the Lunar New Year holiday in January.  Year over year, both imports and exports also are down by 18% & 11% respectively versus one year ago. (data lags by one month).

The China Producer Price Index (PPI) was up slightly in January while the China Consumer Price Index (CPI) also was up by a fraction. For the year, the PPI is down by 1% while the CPI is up by 1%. (data lags by one month).

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

Download the full report here.

Source Int’l Mfg Cost Drivers Report-February, 2016

Comments are closed