ASIA MANUFACTURING COST DRIVERS REPORT Q3
The commodity price trends in the third quarter in Asia are mostly up. Many grades of Plastics, Rubber, Steel, Alum, Wood and Paper raw materials rose in price while some grades of Metals, Textiles and Ceramics went down in price. Petroleum and fuel prices were up in this quarter and labor rates were steady in the lower wage countries. The US Dollar rose moderately against most of the Asian currencies in Q3. China imports and exports saw up in the quarter. The China PPI was down slightly while the China CPI was up slightly. The PMI USA and Hong Kong indexes saw a slightly improvement in Q3 while PMI China saw a little marginally down. Below is a chart of the cost driver trends in 2018-Q3 and for all the details, please see the entire report.
ASIA MANUFACTURING COST DRIVERS REPORT DETAILS
PLASTICS & RUBBER
– All General Purpose plastic resin prices were up in the third quarter, PP(K8303) and Food Grade are up significantly (on average about 8.9%) and the others only up in price marginally. Year over year, PVC and PE prices are down 7.2% and 4.3% respectively. But most plastic prices remain up in price versus one year ago. PP (K8303) is up the most (close to 22%), followed by PP up 13.7% and PS up 9.6% while PET price is unchanged.
– Engineering plastic prices were more mixed with Nylon and Nylon (PA6) and POM prices up by 6.6%, 5.4% and 4.1% respectively, while ABS and PU Foam prices were down slightly. Year over year, ABS up in price the most at 21.4% followed by Nylon up over 11% and the others only up in prices marginally, while ABS and PU Foam were down marginally in price versus one year ago.
– Most of the Rubber prices were up in Q3, BR saw a huge up in price, up over 22% and Latex, SCR5 and CR prices were all up over 5%. NBR is the only one which down marginally in price. EPDM price is unchanged. Year over year, CR and EPDM prices up sharply which are over 19% and BR and NBR up slightly, while Latex and SCR5 down marginally versus one year ago.
– For the third quarter of 2018, most of the prices for Carbon Steel were up, with Steel Wire is up most which was over 12% followed Pig Iron was up 8.5%, others were up marginally. Only Hot Roll Steel Sheet in price was down a little. Year over year, the trend is all up with Cold Roll Steel Tube and Pig Iron up over14% and others up slightly.
– In the Stainless Steel part, 201, 410 and 304 prices were up on average about 3% while 420 and 430 grade down a little in the third quarter. Year over year, the trend is down with most grades of stainless steel down in price on average about 9%. Except for 304 price is up 3.7%.
– All aluminum grades rose faintly in price in the third quarter. Year over year, all prices were down in price, with 6061 is down the most which is over by 27% followed 3003 and A00 down 13.6% and 11.1% respectively, and 1060 price is down marginally.
– In Other Industrial Metals, all grades trend was down in Q3. Nickel’s price was down by 11%, followed Zinc down 7.2% in price and the rest of metals were down a little. Year over year, most of metals prices are up, with Nickel is up most (close to 14%) and Copper and Brass Rod are both up 2.6% while Zinc price is down 12.8% versus one year ago.
WOOD, PAPER & TEXTILES
– Wood prices inched slightly higher in Q3 except Pine and MDF is steady in price. Year over year, MDF’s price increase over 13% and the others only up marginally.
– Meanwhile most grades prices of Paper Materials were no change except for Corrugated Board price down 4.1% in the third quarter. Year over year, most of the paper prices are decreasing, with Corrugated Board down over 16% and others prices down a little. Only Art Paper is steady.
– Textile fabric prices saw little change in the third quarter with Raw Cotton down slightly and the rest were unchanged. Year over year, the grade in prices are mixed, with Raw Cotton and Polyester Fabric up in price t at 2.4% and 0.3% respectively while the 100% Polyester Fabric and 100% Cotton Fabric are down marginally.
CERAMIC AND GLASS RAW MATERIALS
-In Ceramic Raw Materials, only Alumina price was up over 23%, while in Feldspar, Soda Ash and Kaolin were down in price on average 4.6% and rest were down marginally. Year over year, Feldspar, Kaolin and Quartz are all up marginally while rest were down, with Soda Ash is down in price the most by 16%, followed by Alumina down 5.9%, Glass Grade Sand and Glaze were down slightly versus one year ago.
Fuel prices in China were generally going up with LPG and Diesel Oil were significant in the range of 25% ~32% in the third quarter, and year over year, except for Petroleum is unchanged, the rest fuels are up significantly in price between 21%~29% one year ago.
The World Container Index was up 13.7% in the third quarter. Year over year, the World Container Index was sharply up 31% versus one year ago.
COST OF LABOR
Asian labor rates saw no change in the third quarter. Year over year, rates are up in most countries with Indonesia up the most (over 7%) followed by Thailand (up 6.6%), Vietnam (up 6.1%), China (up 5.2%) while India labor rate down 13.5%. Bangladesh was unchanged.
CURRENCY EXCHANGE RATE
For the third quarter, the USD is obviously strengthened slightly against the Thailand Baht, Chinese Yuan, Taiwan New Dollars, India Rupees, Indonesian Rupiah, Vietnam Dong and Bangladesh Taka. Year over year, the biggest gains for the USD are against the Indonesian Rupiah and India Rupees China RMB, Thailand Baht, Vietnam Dong and Indonesia Rupiah while its slightly weaker against the China RMB and Thai Baht.
CHINA TRADE (Data lags by one month)
– China Imports and Exports were both up by 11.36% & 4.61% respectively in the latest third months. Similarly, year over year, China Imports and Exports are up obviously by almost 15%.
– The China Producer Price Index (PPI) gone down 1.1% in the third quarter while the China Consumer Price Index (CPI) rose slightly. Year over year, the China PPI is down 3% while the China CPI is up slightly versus one year ago.
PURCHASING MANAGERS INDEX (PMI)
USA and Hong Kong PMI were both up slightly. Only China PMI was down 0.7% in the third quarter. Year over year, China PMI and Hong Kong PMI is down slightly while USA PMI is up slightly 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.
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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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