Tracking The Trends Which Drive Costs in Asia Manufacturing
Executive Summary
Despite supply headwinds, labor shortages, and an uncertain economic environment, Asia manufacturing continues to surpass the expectations of recent years. Manufacturing has demonstrated continued strength in 2022, building on the momentum it gained emerging from the pandemic, and surpassing expectations from the prior two years. While overall demand and production capacity have hit recent highs, there are indications that the near-term outlook may not be as bright. Asia industry is currently experiencing concerns related to inflation and economic uncertainty. In addition, manufacturers continue to grapple with talent challenges that may limit their growth momentum. Moreover, supply chain issues including sourcing bottlenecks, global logistics backlogs, cost pressures, and cyberattacks will likely remain critical challenges in 2023. As leaders look beyond leading amid disruption and revamp their approach, our 2023 manufacturing industry outlook examines five important trends to consider for manufacturing playbooks in the year ahead.
The commodity price trends in the fourth quarter were mixed with plastics, fuel, freight and currency leading the down-in-price group, while rubber, steel, aluminum, other metals, and textiles led the up-in-price group. Meanwhile paper, ceramic materials, and labor costs showed little change. Year over year, plastics, rubber, steel, aluminum, and freight ended the year lower in price than one year ago while metal, wood, paper, textiles, labor, and fuel all saw price increases in the period.
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
PLASTICS & RUBBER
Overall, the General-Purpose plastic resin prices declined in Q4 of 2022 vs Q3 but only slightly. And, in the most recent month of December the trend appears to have reserved with some price increases. Year over year, the results are mixed with PVC, HIPS, HDPE, and PET all showing price declines from 3% to 30%, while EVA, PS, PE and PE all showing increase of 4% to 11% versus one year ago.
Engineering grade resins displayed a similar trend in Q4 to the General-Purpose grades, with all grades except PU Foam showing price declines, however, they declined less than GP, most less than 1%. Year over year, prices were down on average by 4.5%, led by ABS down 21.8% and POM down17.5% while Nylon increased by 10.3% and Triton and Nylon prices increased slightly, by only about 1% versus 1 year ago.
Rubber prices were more mixed in Q4 with the trend generally up on average by about 1.9%. Reclaimed Rubber led the way up 2.6% while Polybutadiene Rubber led the decliners down 2.2%. Year over year, the trends were more mixed, with Neoprene and Nitrile up the most, 27.4% and 18.4% respectively, while Silicon, Natural Rubber, and Latex all showed substantial price declines of 35.7%, 11.5%, and 10.2% respectively versus one year ago.
METALS
For the fourth quarter of 2022, the prices for most of Carbon Steel grades were up slightly on average about 1% or less versus three months ago with Cold Roll Steel Sheet up the most at 1.7%. Year over year, virtually all carbon steel prices were down on the average 8.6% versus one year ago.
Stainless Steel prices were also up slightly in Q4, on average by 1%-2% compared with last quarter. Year over year, prices were mostly lower than 2021 with 430 and 201 grades down the most on average about 10% versus one year ago
Aluminum prices were higher in Q4, on average by 1%-2%, except 6061 which was up over 5%. Year over year, aluminum prices decreased on the average by 3.2%, however, 6061grade was up 3.6% versus one year ago.
In other Industrial Metals, all showed substantial increases in price led by Nickel (up 18.7% and Brass rods, up 14.3%. Only Zinc bucked the trend, down in price 3.9% versus Q3. Year over year, the prices trends were mixed with Nickel up 53.2%, Brass Rod up 4.8%, while Copper decreased 5.5% and Brass Tubes down 1.9% and Zinc Alloy prices were flat versus one year ago.
WOOD, PAPER & TEXTILES
Wood prices were flat in Q4 showing little change from Q3. Year over year, with MDF grades up 2% to 5%, Beech up 3.8, Fir up 1.3%, Pine up 1.0%, and White Oak up fractionally versus one year ago.
Most all Paper prices were flat in Q4. Year over year, the trend was more mixed with Kraft down 0.7%, Corrugated down 9.5%, while White Cardboard was up 3.9%, Gray Cardboard was up 4.3% and Art Paper was up 0.8% versus one year ago.
Most Textile fabric prices were up slightly in Q4 by about 1% versus last quarter. Only Raw cotton was down in price 3.7%. Year over year, the price trends were mixed with declines led by Raw Cotton down 32.9% and 100% Polyester Fabric down 9.1%, while Non-woven PP up the most at 6.2% followed by T/C fabric up 2.4%, and PVC fabric up on average by 1% versus one year ago.
CERAMIC AND GLASS RAW MATERIALS
Ceramic and Glass Raw Materials showed little change over Q3. Year over year, most of the materials were up in price led by Soda Ash up 26.2%, Alumina up 2.3%, Glass Grade Sand and Feldspar up 2%, Kaolin up 1.3% and Quartz was flat versus one year ago.
FUEL
Fuel prices in China moved lower in the 4th quarter led by Diesel declining the most at 10.1%. Year over year, the trend was higher prices for most fuels. up in prices on average 3.9% versus one year ago.
OCEAN FREIGHT
The World Container Index was down 55.7% versus last quarter. Year over year, the World Container Index was down 77% versus one year ago.
COST OF LABOR
Most of the Asian labor rates were unchanged in Dec. Year over year, Labor costs in China were up 4.5%, Vietnam up 5.9%, and Thailand by 5.4%, while Bangladesh labor costs declined 1.2% versus one year ago levels.
CURRENCY EXCHANGE RATE
For the fourth quarter, the USD strengthened against the CNY by 1.9%, however, the Yuan strengthened in December signaling a possible reversal in that trend. Year over year, the USD remained substantially stronger than most of the Asia currencies versus one year ago.
CHINA TRADE (Data lags by one month)
China Imports were up slightly by almost 1% and China Exports increased 3.4% versus December. Year over year, China Imports decreased 7.3% and Exports decreased 10.1% versus one year ago.
The China Consumer Price Index (CPI) was up only slightly 0.2% and the China Producer Price Index (PPI) increased 0.6% in December. Year over year, the China CPI was up 0.3% and China PPI was down almost 10% versus one year ago.
PURCHASING MANAGERS INDEX (PMI)
The China PMI ended Q4 at 47.0, well below the benchmark 50 for an expanding economy and the Hong Kong PMI ended at 49.0, a little bit closer to the 50 mark. The US PMI also remained below 50, with the Manufacturing PMI at 46.2 in December, down from November’s 47.7, while the services PMI activity index fell to 44.4 in December (November: 46.2). Across the private sector, new orders fell at the sharpest pace since May 2020, while new export orders continued to fall, but at a slightly softer pace than in November. Both input and output price inflation eased in December, while employment growth was marginal and business sentiment was pessimistic by historical standards.
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; 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.
Dataforthisreportcomesfromthesourceslistedandwhileeveryattemptismadetobeascomprehensiveand accurate as possible, please consider that these are just general trends, and you should not draw any specific conclusions from thedata. Werecommend that any informationprovided inthis report beweighed 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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Omicron Covid variant poses very high global risk says WHO
Protect yourself from the Omicron Covid variant with KN95 masks. With about one quarter of the American population still unvaccinated and the Omicron Covid variant threatening, all Americans, whether they are vaccinated or not, should wear masks indoors in public spaces and in places where the coronavirus is still spreading. New cases of the COVID delta variant are still rising in many states, especially those with low vaccination rates. Wearing a KN95 mask regardless of vaccination status can protect everyone.
The World Health Organization (WHO) says that the Omicron Covid variant poses very high global risk and is currently advising all people, vaccinated or not, to continue wearing masks when around others as long as there is community spread. The facts are in and masks protect against COVID.
The CDC is now advising all students and staff to wear masks during in-person learning, regardless of their vaccination status. The guidance could serve to reassure educators nervous about coming back into the classroom and give comfort to working mothers looking to re-enter the workplace. Meanwhile, the debate over face masks rages on, divided largely along partisan lines, and has spurred more discussion about mandatory vaccinations in government, higher education, and workplaces.
Which Masks Protect Against COVID best?
Experts say that masking up again is essential and the quality of the mask does matter. A KN95 or N95 mask is going to give a lot more protection since both masks are designed to filter 95% of particles. We know that masks are effective against every variant that this virus has produced when they are tight fitting and used properly to cover the nose and mouth. Some health care experts are now questioning the effectiveness of cloth masks which are reusable after laundering and disposable surgical masks which are cheaper and recommend double masking. That could lead to renewed interest in N95 and KN95 masks that fit much tighter. A well-fitted N95 or KN95 mask is extremely effective in stopping the virus, more so than a cloth or disposable surgical masks.
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COVID Delta Variant Is Spreading Quickly In The United States
With more than ¼ of the American population still unvaccinated and the COVID delta variant causing surging infections in the US, the Centers for Disease Control and Prevention (CDC) reversed their previous guidance this week and is now recommending once more that all Americans, whether they are vaccinated or not, wear masks indoors in public spaces in places where the coronavirus is spreading. The fact show that cases are now rising in most every state with hospitalizations surging in states with low vaccination rates. Over 80% of the new cases are the COVID delta variant. While most of the outbreaks are happening among unvaccinated individuals, wearing a mask regardless of vaccination status can protect everyone.
In May when the CDC suggested that vaccinated people no longer needed to wear masks, indoors or out, the US joined a few other western countries to move away from mask usage before the end of the pandemic. Now, less than three months later, the CDC announced it had again changed its guidance on masks based on data showing that vaccinated people infected with the highly infectious delta variant carry the same viral load as unvaccinated people who are infected. The World Health Organization (WHO) is also currently advising all people, vaccinated or not, to continue wearing masks when around others as long as there is community spread. The facts are in and masks protect against the COVID delta variant.
In addition, the CDC also provided new guidance on face masks in schools and is now advising all students and staff to wear masks during in-person learning, regardless of their vaccination status. The guidance could serve to reassure educators nervous about coming back into the classroom and give comfort to working mothers looking to re-enter the workplace. Meanwhile, the debate over face masks rages on, divided largely along partisan lines, and has spurred more discussion about mandatory vaccinations in government, higher education, and workplaces.
Which Masks Protect Against the COVID Delta Variant?
Experts say that masking up again is essential to combat the highly contagious delta variant. It’s reported to have similar levels of concentrations in the air and permeability as the original COVID strains, but the quality of the mask does matter. A KN95 or N95 mask is going to give a lot more protection since both masks are designed to filter 95% of particles. We know that masks are effective against every variant that this virus has produced when they are tight fitting and used properly to cover the nose and mouth. And, wearing masks can prevent us from shutting down our economy again. Because the delta variant is so contagious, some health care experts are now questioning the effectiveness of cloth masks which are reusable after laundering and disposable surgical masks which are cheaper. That could lead to renewed interest in N95 and KN95 masks that fit much tighter. A well-fitted N95 or KN95 mask is extremely effective in stopping the virus, more so than a cloth or disposable surgical masks.
The CDC warns that about 60% of KN95 masks in the U.S. are counterfeit, and do not meet US standards. VexStar Medical has FDA approved KN95 masks in stock and ready for immediate delivery. Contact us today at 502-589-7900 to protect yourself, your family, and your staff.
What’s the difference between N95 and KN95 Masks?
Simply put, N95 masks are the US standard for respirator masks (United States NIOSH-42CFR84) while KN95 masks are the China standard (China GB2626-2006). The US National Institute for Occupational Safety and Health (NIOSH), a division of the CDC, requires manufacturers to meet the NIOSH standards in order to label their masks as N95s but, despite differences, the two masks are nearly equivalent on many critical features. One advantage of KN95 over N95 mask is that to be certified, the China government requires the manufacturer to run mask fit tests on humans while the N95 mask standard does not require manufacturers to run fit tests. Check out all the details of the differences between N95 and KN95 in this comparison chart.
Posted by ASK SOURCE on | Comments Off on LOOKING FOR A RELIABLE SUPPLIER OF PPE?
Do you know someone who has been having a hard time finding a reliable supplier of PPE to protect medical professionals?
Lets face it, finding a reliable supplier of PPE is no easy task for large health care organizations and is especially difficult for smaller clinics, doctors, and other medical offices. Shortages of Personal Protective Equipment (PPE) in the USA have reached crisis proportions and everyone is scrambling to buy direct from China’s mature market where up to 85% of the world’s suppliers are located including the basic raw material, nonwoven polypropylene fabric. With health professionals facing shortages and the CDC recommending the voluntary use of face coverings, do you wonder where and how to fill your supply lines reliably?
In today’s market it is “buyer beware” like never before. It seems that whenever there is a strong market driven by fear there are also plenty of scammers and marginal suppliers ready to take your money by telling you exactly what you want to hear. For example, Canadian health officials reported recently that “around 1 million KN95 respirators acquired from China have failed to meet federal Covid-19 standards for use by front-line health professionals.” If you want to protect your organization from a “PPE Nightmare” it is imperative that you find a reliable supplier of PPE and leverage their experience, network, and infrastructure to your advantage.
WHAT TO DO?
Mitigating PPE Quality Risks
You should know that due to the rush of getting as much product out the door as possible in the least amount of time, some PPE manufacturers are not making quality product that consistently meets the specifications that it is rated for. Hospitals and medical facilities in Europe, the United States, and Australia have all recently discovered defective and counterfeit N95 and KN95 face masks from China.
Given the tight market and rising costs of PPE, it is highly recommended to conduct a pre-shipment inspection at the factory before allowing any PPE to ship. While inspections are not a 100% guarantee, the use of a statistical, random sampling and auditing the lot of goods at the factory that produced them is standard protocol and mitigates your risk significantly, raising your confidence that there will not be any issues when the goods arrive. In addition, when manufacturers know that a buyer is going to do a physical pre-shipment inspection, just knowing it can make them act more diligently.
Performing a professional pre-shipment inspection allows a visual check of appearance, quantity, labeling, packaging verifications and on-the-spot tests including flammability, colorfastness, airflow, dampness, mold, and odor to further mitigate your risk. Independent lab tests can provide the maximum level of verification but may take up to a week or longer and cost several thousand dollars. However, independent testing may make sense for large orders depending on the urgency of the goods but when independent lab tests are required it is recommended to have a third-party select random samples from the shipping lot, not rely on the factory to do it themselves.
Five Easy Steps To Avoid Getting Burned on PPE
According to current regulations, which have been tightened recently, the manufacturer that produces the product, the exporter, and the importer all need to be registered with their respective governments. You can qualify a reliable supplier of PPE in China by making sure the factory and importer are registered with the FDA for the specific product that you are buying and that the exporter is registered with the China government to export the specific product that you are buying. If you are using a broker, take an extra step to make sure that they can provide proof of their relationship with the manufacturer. And, in addition to verifying that their registrations are legitimate, make sure that you have proper documentation that the production also meets the international standards that it is supposed to meet. In summary, there are five easy steps to avoid getting burned when you buy PPE in China:
Verify the Manufacturer
Verify the Raw Materials
Verify the Exporter of Record
Inspect the Finished Product Pre- Shipment
Verify the Importer of Record
In short, due diligence is more important than ever when trying to qualify a reliable supplier of PPE.
Source International is a Reliable Supplier of PPE
We invite you to share your experiences in finding a reliable supplier of PPE and what unmet PPE needs you have that we can help you solve. Supplying PPE that protect our medical workers is a job that requires attention to detail and a professional team.
TheSource International PPE Team in the USA, China, and Vietnam serves customers large and small for high quality, on-time PPE at a fair price. As a registered FDA importer, we sell specific FDA registered products such as surgical masks, face shields, disposable isolation gowns, FFP2 respiratory masks, KN95 masks and other PPE products.
Our team of on-the-ground supply chain professionals perform inspections and testing of randomly selected samples from every shipment on-site at our FDA certified manufacturers. Years of experience in supplying OSHA first aid kits and other disposable medical devices and a 3-decade long track record of excellence are your assurances that Source International is a reliable supplier of PPE.
Contact our USA offices to speak with one of our PPE professionals on your time zone (east and west) for the most up-to-date product offerings, cost, and availability.
