Asia Manufacturing Cost Drivers – 3/16

 

SI Mfg Cost Drivers Synopsis – March, 2016

COMMODITY PRICES

General Purpose Plastic resin prices were up by over 10% on average in March, led by GP-PP which was up close to 23%, meanwhile, Food Grade PP & PET conversely moved down slightly. Year-over-year, most prices are still significantly lower on average by over 9% , led by Food Grade PP down by over 23%, and PS prices down by 13% while GP-PP is up 5% and GP-PS up by 13%..

Engineering Grade Plastic prices were mostly unchanged and/or favorable in March, with PA6 down by another 6% with the rest were unchanged.

Year-over-year price, except PC which is up slightly and ABS which is equal to year ago, the rest of the engineering resins are down in price on average by over 14%, led by PA6 by over 28%.

Most Rubber prices reversing the recent downward trend jumping by 1%-11% in March, with the exception of Latex which was down another 4%.  All prices remain well below last year’s levels by 15%-35%.

Carbon Steel prices jumped again in March, with all prices up by over 13% on average except Pig Iron price which was flat. Year over year, all prices are significant lower by over 27% on average.

Likewise, most Stainless Steel prices were up in March, led by 430 & 201 grades up 10 to 7% respectively. Year-over-year stainless prices are lower by over 9% on average except stainless steel 410 grade which is higher by over 7% compared with one year ago.

Aluminum prices continued February’s upward trend with all prices up another 3%in March on average. Year-over-year most prices remain lower on average by 14% with the exception of Aluminum 6061 which is now priced 27% above one year ago.

In other metals, all prices were up in March by 2% on average, with the exception of Nickel which was unchanged. Year-over-year, Brass, Copper & Nickel all remain well below last levels by over 23% on average, with the exception of Zinc, which is slightly higher versus one year ago.

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

Also, Prices for most paper stocks were unchanged in March. Year-over-year, prices are higher by 3% on average, except Art Paper, which is equal to year ago.

Textile Fabrics were mostly flat, except Polyester which was down sharply by 14% and Cotton which was down by over 3%. Year-over-year, Polyester is down by 30% and Cotton is down by over 12%, while the rest of the textile prices are flat.

Except Alumina which moved up in price by over 6% the rest of Ceramics Raw Materials prices were flat in March. Year over year, Feldspar, Kaolin & Alumina Quartz are down by over 6%, 4% and 26% respectively, while Quartz bucks the trend, up by over 5% versus one year ago.

LABOR, FUEL, FREIGHT & CURRENCY

In Asian labor rates, the Thailand and Bangladesh labor rates were unchanged in March and year-over-year, while China Labor rates were stable in March but up over 4% versus one year ago.

All fuel prices continued significantly lower in March, following February’s favorable trends, down by over 2% on average. Year-over-year, likewise, all prices are significantly lower in price on average by close 25%.

Ocean Freight rates were unchanged in March. Year-over-year freight rates from China ports are down over 21% to the west coast and 42% to the east coast.

Asian Currencies, all Asian Currencies showed strengthened against the US Dollar in March with the Indian Rupee & Taiwan Dollar stronger by 3%, the This Baht & China Yuan stronger by 2% & the Bangladesh Taka & Vietnam Dong only fractionally stronger. -over-year, all Asian Currencies were weaker against the US Dollar by over 4% on average.

KEY INDEXES

As for PMI indexes, all PMI indicated strength in March, with both the China Purchasing Managers & the USA Purchasing Managers Index back above 50 benchmark while the HK China Purchasing Managers Index hovered just below the 50 mark.

Both China Imports & Exports decreased by another 18% & 28% respectively in February. Year over year, both imports and exports also are down by 13% & 25% respectively versus one year ago. (data lags by one month).

The China Producer Price Index (PPI) was up slightly in February while the China Consumer Price Index (CPI) also was up by a fraction. For the year, the PPI is down by 0.1% while the CPI is up by 0.9%. (data lags by one month).

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

Download the full report here.

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

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