ASIA MANUFACTURING COST DRIVERS REPORT | Q3 2019
Tracking The Trends Which Drive Costs In Asian Manufacturing
Q3– 2019 (Jul, Aug, Sept)
The commodity price trends in the third quarter are mixed in Asia. Many grades of Plastics, Rubber, Paper, Textiles and Ceramics raw materials prices were mostly down in price. While some grades of Alum, Metals, Wood and Fuel prices were all up. Labor rates were steady in the lower wage countries. The trend for World Container Index was decreased. Only Steel prices were mixed. The US Dollar was up a little bit against most of the Asian currencies in Q3. China imports and exports saw slightly up in this quarter. The China CPI was up marginally, and the China PPI was slightly down. The PMI indexes saw slightly down in Q3, PMI China and PMI Hong Kong saw faintly up, while PMI USA decreased slightly. Below is a chart of the general trends and for all the details, please see the entire report.
PLASTICS & RUBBER
– Most of General Purpose plastic prices were down in third quarter. Expect for the prices for PET (SE-3030) and PE (LD400/Injection) are steady. Balance of the general plastic prices was down on the average of 4.6%. Year over year, most of the general plastic prices are down, with PP (K8303) decreased marginally which up to 2%, other plastic prices are down over 12%. Only PVC (S700) is unchanged versus one year ago.
-The third quarter of engineering plastic prices were down, PC (L-1250Y) in price was down 3.7, followed by Nylon (PA6) and ABS both in price decreased 1.5%, while PU Foam was unchanged. Similarly, year over year, ABS down most in price which is over 18%, followed by PC (L-1250Y) down 8.4%, and PU Foam’s price is down faintly. While Nylon (PA66) and POM prices are increase slightly. Only Nylon (PA6) is steady versus one year ago.
– Most of the Rubber prices were down in Q3, BR9000 saw a little up which is over 7.8%. CR saw obviously down in price, which was over 8.9%. Latex, EPDM and SCR5 prices were all down over 5%. NBR price was steady. Year over year, expect for NBR price is unchanged, balance of rubber prices are down, with CR, EPDM and BR9000 prices are sharply down 13%, followed by Latex and SCR5 prices are down 4% and 0.9% respectively versus one year ago.
– For the third quarter of 2019, the prices for Carbon Steel were mixed. Hot Roll Steel Tube Cold Roll Steel Sheet prices were up 5.4% and 4.3% respectively, while Hot Roll Steel Sheet was down 3.2% in price and Steel Wire price was down 0.2%. Cold Roll Steel Tube and Pig Iron prices were steady. Year over year, all of carbon steels in price are down on the average 9.1% versus one year ago.
– In the Stainless Steel part, most of the grades of prices were up in the third quarter, with 304, 430 and 420 in price up on average of 4.2%, while 410 and 201 prices were down 2.5% and 6.5% respectively. Year over year, most of the Stainless Steel prices are down, with 201 and 410 prices sharply down over 13%, followed by 420 and 430 prices down slightly versus one year ago.
– All aluminum prices were up faintly in the third quarter. Year over year, Only 6061 in price is up 0.7%, the rest of grades are down on the average of 2.1% versus one year ago.
– In other Industrial Metals, the trend for most of grades was increasing in Q3, with Nickel in price was significantly up 36.6%, and the prices for Copper and Brass Rod were both up marginally. Only Zinc in price was down 9.2%. Similarly, year over year, Nickel price is significantly up 31.6%, and Brass Rod price is up slightly. While Zinc price is sharply down 16.6% and Copper price is down 6.9% versus one year ago.
WOOD, PAPER & TEXTILE
– Wood prices were slightly higher in Q3, except for Pine Softwood was down marginally in price, Beech Hardwood and MDF prices were up 0.3% and 1.5% respectively. Year over year, Beech Hardwood and Pine Softwood are up marginally, while MDF price is unchanged versus one year ago.
– Similarly, most grades prices of Paper Materials were down in the third quarter, expect for Art Paper in price is steady, the rest of grades prices were down on the average of 3.8%. Year over year, the trend for paper price is decreasing, with Corrugated Board and Art Paper both enormously down over 23%, Kraft paper and Gray Cardbord are up faintly. While Kraft paper in price is unchanged versus one year ago.
– Textile fabric prices saw a little change in the third quarter, with Raw Cotton price was obviously down 10.2% in price, and 100% Polyester Fabric price down 5.3%. Meanwhile, year over year, with Raw Cotton price is significantly down 22.4%, and 100% Polyester Fabric price is sharply down 14.5% versus one year ago.
CERAMIC AND GLASS RAW MATERIALS
-In Ceramic Raw Materials, the trend for the grades was down in Q3, with Alumina obviously dropped 18.9%, followed by Soda Ash in price was down 7.5%, and Quartz’s price was down marginally. Year over year, Alumina is down most which is over 22%, followed by Soda Ash is down 11.9%, Quartz, Glass material and Glaze prices are down on the average of 2.9%. While Kaolin and Feldspar prices are up 6.1% and 2% respectively versus one year ago.
Fuel prices in China were generally going up, with LPG , Diesel Oil and Natural Gas prices were obviously up in the range of 9% ~15% in the third quarter. However, Petroleum price was unchanged. On the contrary, year over year, all Fuel prices are decreasing in price, with Diesel Oil in price is significantly down 30.5%, followed by LPG price sharply down 29%, the rest fuels are down in price between 8%~15% versus one year ago.
The World Container Index was faintly down 0.3% in the third quarter. Year over year, the World Container Index is sharply down 26% versus one year ago.
COST OF LABOR
All of the Asian labor rates were unchanged in Q3. Year over year, rates are up in most countries with Bangladesh rate is sharply up the most (over 50%) followed by Indonesia (up 9.4%), Vietnam and India are both up over 5%, and China is up marginally.
CURRENCY EXCHANGE RATE
For the third quarter, the USD was obviously strength against the Indonesian Rupiah, and slightly strength against China RMB, Bangladesh Taka, India Rupees, while slightly weaker against Taiwan New Dollars, Thailand Baht and Vietnam Dong. Year over year, the biggest gains for the USD are against the Indonesian Rupiah, followed by China RMB, and slightly strength against Bangladesh Taka, Taiwan New Dollars and India Rupees, while it’s slightly weaker against the Thailand Baht, Indonesia Rupiah and Vietnam Dong.
CHINA TRADE (Data lags by one month)
– China Imports was slightly up 3.6% and Exports was up 2.01% in the third quarter. Year over year, China Imports is obviously down 8.51% while Exports is down 3.79% versus one year ago.
– The China Consumer Price Index (CPI) was up marginally while the China Producer Price Index (PPI) was faintly down 0.4% in the third quarter. Year over year, the China PPI is down 4.63% while the China CPI is up marginally versus one year ago.
PURCHASING MANAGERS INDEX (PMI)
USA PMI and Hong Kong PMI were both up slightly, while China PMI was down in the third quarter. Year over year, China PMI and USA PMI are both down, with UPS PMI down most which is over 22% followed by China PMI down 1.97%, while Hong Kong PMI is up 5.98% versus one year ago.
CONTACT US FOR MORE INFORMATION
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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.