Q1– 2023 (Jan. Feb. Mar.)

Tracking The Trends That Drive Costs in Asian Manufacturing

Executive Summary

With the lifting of most of the world-side pandemic restrictions by 2023, Asia manufacturing continues to stabilize and rebound but at a slower pace than in the past. The emergence of a new wave of challenges facing Asia supply chains include geopolitical crisis’s such as the Russia-Ukraine conflict and rising China-US tensions, inflation, and a focus by western buyers on near-shoring, sustainability, and diversity initiatives.

Rising inflation has started to spur debates and is projected to rise further in 2023, due in part to pent-up demand following the world-wide economic reopening. Slower retail sales, however, following the Christmas holidays have caused some bloated inventories and dampened manufacturing demand. Sustainability and climate change are having a tangible impact on raw materials and business operations as manufacturers become more proactive in terms of introducing environmentally friendly products or processes. In addition, automation has accelerated to offset the impact of rising wages, lower labor availability, and increased governmental regulations for workers.

The commodity price trends in the first quarter of 2023 were mostly positive with most grades of plastics, rubber, stainless steel, aluminum, wood, paper, fuel, and freight decreasing in price along with a continued strong dollar. The commodities showing increases in the first quarter include carbon steel, other industrial metals, textiles, and ceramic/glass raw materials which led the up-in-price group. Meanwhile labor costs were most stable showing little change in the quarter. Year over year, plastics, rubber, steel, aluminum, metals, fuel, textiles, and freight ended the year lower in price versus one year ago while ceramics/glass raw materials, and labor ended the year higher in price. Only wood saw little change year over year.

Below is a chart of the overall trends. For all the details, please see the entire report below or download it from the link at the end.

Report Details


Overall, General Purpose plastic resin prices declined on average by almost 5% versus Q4 led by PP, PE, and EVA all down over 8%.  Year over year, virtually all GP plastic prices are lower on average by almost 11% versus one year ago led by PVC and PP which declined the most­­­­.

Engineering grade resins displayed a similar trend in Q1 to the GP grades, with all grades except POM and PU Foam showing price declines averaging about 5%. Year over year, prices were down on average by 9%, led by ABS down 24.8%, PC down 20.2% and POM down 15.4% while only Nylon PA6 increased by 1.7% versus 1 year ago.

Rubber prices were also down in Q1 on average by about 4%. EPDM, Latex, and Polybutadiene Rubber led the way down 12.5%, 8.3%, and 7.5% respectively while Natural Rubber and Reclaimed Rubber were up in price 5.7% and 1.5% respectively. Year over year, the trends were similar, with Silicon down 28.3%, EPDM down 15.8%, Latex down 12.0%, and Polybutadiene Rubber down 11.4%, while Reclaimed Rubber was up 4.2% and Nitrile was up 1.4% versus one year ago.

asia manufacturing cost drivers report, Q1 2023


For the first quarter of 2023, the prices for most grades of Carbon Steel were up slightly on average by about 1.5%. Cold Roll Steel Sheet was up 4.5%, Hot Rolled Steel Plate and steels poles were both up 8%, and Steel Wire was up 4% while Pig Iron was down by 2.8%. Year over year, most of carbon steels in prices were down on the average 10.5% versus one year ago.

asia manufacturing cost drivers report, Q1 2023

Stainless steel prices were down on average by about 5% in the first quarter led by 430 down almost 13%, and 202 down 10%. Year over year, stainless is down on average by 17% with 430 down 18.9%, 304 down 21.9%, 410 down 11.5%, 201 down 14.4%, and 420 down 15.6% versus one year ago.

asia manufacturing cost drivers report, Q1 2023

Aluminum prices were down on the average about 1.5% in Q1, however, the trend appeared to reverse itself as prices began to creep up in March. Year over year, all aluminum prices decreased on the average 14.85%. A00 was down 17.6%, 1060 was down 15.5%, 3003 was down 13.9% , 6061 was down 14.2% and A380 was down 13.6%.

asia manufacturing cost drivers report, Q1 2023

In other Industrial Metals, Q1 saw Nickel down in price by 17.5% and Zinc down by 4.5% while the trend for Brass and Copper were both up in price around 5% each.  Year over year, Zinc prices were lower by 13.8%, Nickel decreased 13.7% Copper decreased 6% and, Brass prices were mostly unchanged versus one year ago.

asia manufacturing cost drivers report, Q1 2023


Wood prices saw little change in the first quarter, down on average by less than 1%. Similarly, year over year, Medium Density Fiberboard was down in price only slightly 1%, Fir, White Oak and Pine were unchanged, while Beech wood was up slight 1% higher versus one year ago.


Paper prices were down on average by about 8% ­­in Q1 led by corrugated board down almost 21%, white and gray cardboard down around 10% and kraft and art paper down about 1%. Year over year, the trends are similar with corrugated down almost 23%, white cardboard down 6.5%, gray cardboard down 5% and art paper down almost 2% while kraft prices were relatively the same versus one year ago.


Ceramic and Glass raw materials trended up slightly in the first quarter by about 0.5% led by Feldspar up almost 3% and Quartz up almost 2%. Year over year, the trend is similar with Feldspar was up 3.9%, Kaolin was up 2.1%, Quartz was up 1.9% Alumina was down 1%, Glaze was up fractionally. Soda Ash was up by 7.1% and Glass Grade Sand was up 1.4% versus one year ago.


Fuel prices trended down in the first quarter by about 1%.  Year over year, the trend for the grades were up in prices on average 13% versus one year ago.


The World Container Index showed a continuation of the down trend in prices averaging 18% lower in Q1 versus Q4 of 2022. Year over year, the World Container Index was down 79% versus one year ago.


Most Asian labor rates were unchanged in the first quarter. Year over year, labor costs in China was flat in average, however, Fujian and Hunan areas were both up about 13%.  Indonesia and Vietnam were both up 6% and Thailand was up 7%.


For the first quarter, the USD weakened against CNY by about 1% versus last quarter ending at around 6.85. Year over year, the USD was stronger against CNY by 8%.

CHINA TRADE (Data lags by one month)

China Imports were up by 2.6% and China Exports decreased 26.7%. Year over year, China Imports increased 5.5% and Exports decreased 1.4% versus one year ago.

The China Consumer Price Index (CPI) was down 0.3% and the China Producer Price Index (PPI) decreased 1.2%. Year over year, the China CPI was down 0.8% and China PPI was down 10% versus one year ago.


The China PMI improved greatly in Q1 ending the quarter at 51.9, above the benchmark 50 for an expanding economy and the Hong Kong PMI ended at 53.5, even higher above the 50 mark. Conversely, the US PMI remained about the same as it started the quarter below 50, with the Manufacturing PMI at 46.3 in March, the lowest since May of 2020, and compared to 47.7 in February implying that rising interest rates and growing recession fears are starting to weigh on businesses.


Thank you for taking the time to follow trends in Asia manufacturing. Source International has operational offices in Louisville, Kentucky; Xiamen, China; and Ho Chi Mihm, Vietnam. 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.

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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