Posted by Source International on | Comments Off on How to Build a Sustainable Supply Chain
Sustainability is about making business decisions that protect and preserve our environment while still offering profitable products and services. It’s also about reducing waste, promoting ethical working conditions, and delivering products and services efficiently.
It’s no surprise that sustainability is closely tied to your supply chain. Here, we will present our top suggestions for assessing your existing supply chain, along with tips for improving its efficiency, transparency, and value.
What is Supply Chain Sustainability?
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You’ll find environmental supply chain decisions at every turn, including:
Resource consumption
Environmentally friendly manufacturing
Minimizing and managing waste
Prioritizing “green” materials
Reducing carbon footprint in production and logistics
Ethical choices for offshoring or outsourcing
Transparency allows you to make the best choices by giving visibility into material sourcing, manufacturing, and logistics (including last-mile delivery and customer returns). One way to make sure your actions match your stated goals is by working with an experienced partner like Source International for services including:
Factory sourcing: Matching your product and goals to vetted manufacturers with the best capabilities, quality practices, and production scale.
Product development: An intentional and proven system for designing, planning, prototyping, testing, and refining your product.
Developing supply chain resilience: The ability to right-size inventory, anticipate obstacles, and make adjustments to maintain sustainable production and distribution.
How to Build a Sustainable Supply Chain
Every “link” in your supply chain contributes value, or imparts vulnerability to your operations.
Identify Sustainability Issues Within the Supply Chain
You may have one or multiple supply chains, each with unique requirements and challenges. Map out each component of your supply chain(s) including material sourcing, production, and distribution steps. This systematic viewpoint draws attention to breakdowns, weak spots, and waste.
Assess your supply chain for consistent bottlenecks, hard-to-procure materials, complex or highly-skilled manufacturing capabilities you lack, recurring quality issues, and distribution slowdowns. These are good starting points for improvement.
Sustainability also includes your employees and those at other facilities working on your behalf, so consider how supply chain decisions impact things like:
Exposure to hazardous chemicals and waste products
Poor working conditions
Health and safety issues due to materials, equipment, or work environment
Adopt a Circular Supply Chain
Traditional, linear supply chains usually start with raw materials shipped to a manufacturer and end with post-production scrap and waste. In contrast, a circular supply chain aims to reduce waste.
Adding two steps can promote a more circular supply chain. First, develop a plan for recycling or reusing resources. This includes incorporating recycled materials, streamlining with product designs that have parts or materials in common, refurbishing products or equipment to extend their useful lives, or finding ways to use or recycle extra supplies. Second, seek out suppliers that will take back remaining materials for redistribution.
Fuel Consumption
Fuel consumption is a drag on finances and sustainability efforts. You can take steps to reduce fuel consumption throughout your supply chain:
Driver training: Vehicle operation impacts fuel economy. Provide training in SAFED (Safe and Fuel Efficient Driving) practices for your own drivers, and seek out logistics partners who do the same.
Efficient vehicles: Whether you purchase your own or outsource logistics, look for fleet vehicles with features that contribute to efficiency such as aerodynamic body designs, appropriately sized cargo and passenger vehicles, and fuel-efficient engines.
Eliminate Dead Mileage
Dead mileage refers to the time and space wasted, and the emissions generated from driving an empty truck or shipping vehicle back to a warehouse, factory, or distribution center.
Sustainability-minded distribution and logistics account for this problem with efficiently planned shipping routes, combined partial loads, and incorporation of additional deliveries on return journeys. Many third-party carriers specialize in this.
Engage Suppliers
Most organizations cannot control every aspect of their supply chain. Complex products, limited material availability, specialized processes, and limited staff mean you’ll rely on other organizations at least part of the time.
You still have options to prioritize sustainability in how you engage with vendors and suppliers. For example:
Negotiate contracts that include sustainable initiatives
Discuss your sustainability goals with your vendors frequently
Recognize sustainably-minded vendors on your website and in customer communications
Offer to share the costs of sustainability initiatives
Seek out vendors that are ISO 14001 certified for sustainable practices
Build a Sustainable Supply Chain With Source International
At Source International, we provide supply management, product development, and OEM contract manufacturing services to help customers optimize their supply chains. We’re committed to connecting organizations of all sizes with high-quality, sustainable manufacturing resources.
Contact us today to discuss your next project, learn more about our capabilities, or request a quote.
Posted by Joe Simon on | Comments Off on OEM vs. ODM in Manufacturing
Original equipment manufacturers (OEMs) and original design manufacturers (ODMs) play a critical role in helping businesses bring new products to market. Although these terms are often used interchangeably, they have key distinctions in areas such as production, branding, and product development. Here, we’ll dive into the purpose, benefits, and drawbacks of OEMs and ODMs to help you determine which option is best for your contract manufacturing needs.
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What is OEM?
An OEM produces and assembles parts on behalf of a brand or customer. OEMs typically specialize in large-scale production and manufacture products based on the specifications required by the client, who then sells the final products to consumers under their brand name.
Benefits of OEM
One of the primary benefits of OEMs is that the customer maintains complete creative control over the product design. There are also little to no property restrictions when working with an OEM, meaning you can switch to a different manufacturer down the line if necessary.
Other key benefits of working with an OEM include:
Faster Response Times and Lower Production Costs
High-Quality Components that Match Original Specifications
Access To Technical and Engineering Support
Greater Consistency and Longevity of Components
Robust Manufacturer’s Warranties
Enhanced ROI
Product Design Flexibility
Disadvantages of OEM
A drawback of OEMs is the amount of resources needed to produce a unique product. This can include research and development costs, as well as the time it takes to create the design before it’s ready for manufacturing. These investments can be quite high and introduce a certain level of risk to a business.
It’s also important to keep the following in mind regarding OEMs:
The Brand Owner is Responsible for Business and Revenue
There May Be a Lack of Differentiation Between Your Product and Competitors Who May be Using the Same OEM
OEMs Have Minimal Control Over the Product and Its Branding
What is ODM?
With an ODM, otherwise referred to as private labeling or white labeling, the manufacturer has an existing product design that a customer can make certain changes to and sell under their own brand. Customers can often make changes to colors, branding, or packaging, but the primary design remains the same.
Advantages of ODM
A main benefit of ODMs is the lower amount of resources a customer needs to create a product. Rather than investing large sums of time and money into developing a new product, customers can use an existing design and focus their resources on marketing strategies.
Other benefits of ODMs include:
ODMs Have More Control Over the Manufacturing Process
ODMs can Adapt to Changing Client Needs
More Cost-Effective Production Due to Specialization (Lower Unit Cost)
Disadvantages of ODM
The drawback of ODMs is that it can be challenging to stand out amongst competitors who offer the same product design at a similar price. This level of pricing competition could result in lower profit margins for your business.
Other disadvantages include:
Risk Of Product Imitation
Minimal Control Over the Final Product
Client Is Responsible for Business and Revenue
Contact Source International
Deciding between OEMs vs. ODMs requires careful consideration of your unique product needs, branding requirements, budget, and more. Founded in 1988, Source International has become one of the largest supply chain management companies in North America. We can provide OEM and ODM contract manufacturing outsourcing services with a proven track record and guaranteed satisfaction.
For more information about OEMs and ODMs, or to get started on your contract manufacturing solution, contact Source International today.
Posted by Joe Simon on | Comments Off on The Benefits of Automation in Assembly Lines
Your organization’s manufacturing and assembly processes are two of the most defining elements of how profitable your organization can be. Manual assembly, in-house assembly, and outsourced or automated assembly are all different approaches, but the development of cutting-edge automated assembly systems promises greater capabilities and profitability for organizations across every industry. Learn more about what automated assembly is and the benefits it can offer your business.
What Is Automated Assembly?
Assembly processes, in general, take different components and use them to create a complete, more complex end product by packaging, fastening, or otherwise combining parts in a specific way. Historically, these processes have been completed manually. They could take the form of assembly lines or process stations where assemblers either focused on one portion of the assembly process or completed assemblies and subassemblies in their entirety.
Modern-day automation technology is transforming these processes with options like:
Robotics that can pick, place, and assemble goods
Conveyance systems that route in-progress goods between process stations from start to finish
Vision tools that can constantly track goods, monitor the process for problems or slowdowns, and provide a greater volume of data for quality control
Automated assembly processes can also come in a wide range of options, such as lean automation, which prioritizes reducing business waste before finalizing the automation process itself. Two other common styles of automation include flexible automation, powered by programmable systems that can produce product variations or different product types, and hard automation, which is fixed and only produces one type of product (typically at high volumes).
Benefits of Automated Assembly
Automated business processes bring a host of benefits, including reduced costs, reduced waste, and increased data connectivity. Some of the specific advantages of using automated assembly lines include the following:
Consistent Throughput and Output: Automation provides consistency. The assembly steps are followed without any risk of human error, resulting in higher quality control and less variance in output in every batch.
Enhanced Tracking Capabilities: Because automated assembly manufacturing systems use vision tools and data to track the movement of goods throughout the assembly process, each assembly system increases your tracking capabilities. You can trace a single part, troubleshoot potential errors, and provide more detailed production histories for every product.
Greater Capacity: Automation processes can work 24/7 without slowing down or getting tired. They can also move increasingly faster than human workers. As a result, your production capabilities increase.
Reliability: Automated assembly line processes are much less vulnerable to human errors and mistakes. Even complex assembly processes can be performed more reliably.
Quality: Precision leads to increased quality. There will be much less risk of variability, improperly fastened parts, or missed steps. Not only are robotic systems less capable of making these errors, but increased tracking capabilities can also note any errors and alert the centralized control system or operator.
Savings: Human labor is one of the biggest costs for production and assembly. Not only do human workers need to be paid wages, but auxiliary costs also include training, turnover, insurance coverage, and increased product waste due to mistakes. Robotic systems do not incur these costs.
Choose Automated Assembly Processes With Source International
Automated manufacturing offers faster, more reliable, and more cost-effective assembly processes for any business. At Source International, we partner with organizations to provide the right automated assembly line configurations to streamline your product assembly processes and increase your profitability. Reach out today to get started or to request a quote.
Posted by Joe Simon on | Comments Off on 10 Benefits of Sheet Metal Fabrication
Sheet metal fabrication includes a variety of processes and can be used to create simple to complex shapes in anything from prototypes to high-volume productions. When combined with CNC machining or surface finishing processes like powder coating, it is a versatile option for any industry. Whether you choose progressive stamping, deep drawing, or laser cutting, sheet metal fabrication has numerous benefits.
Sheet Metal Fabrication Benefits
Sheet metal parts offer several benefits that make them a popular choice in various industries. The following are some of the major benefits of sheet metal fabrication that make it so appealing for many different product applications:
Here are some key advantages of using sheet metal parts:
High Strength
Metal, especially steel, offers excellent structural integrity and can withstand heavy loads and harsh environments. Sheet metal parts are ideal for automotive, construction, and industrial equipment.
Malleable
Sheet metal is easy to mold and form into various shapes, and also maintains its structural integrity when undergoing the fabrication process. Sheet metal is very popular for use in applications requiring ample malleability, such as building designs.
Durable
Sheet metal materials are also capable of holding high-pressure levels, with the added ability to resist corrosion and degradation resulting from exposure to sun, water, moisture, and corrosion in all types of environments.
Lightweight
In spite of their robustness, sheet metal components exhibit a relatively low weight when compared to alternative materials such as solid metal blocks or castings. This makes them advantageous in applications where weight reduction is crucial, such as aerospace or automotive industries, as it can contribute to improved fuel efficiency and overall performance.
Versatility in Design
Sheet metal fabrication allows for great design flexibility. Sheet metal can be easily cut, bent, and shaped into complex forms, offering designers the freedom to create parts with intricate geometries, creating customized and aesthetically pleasing components.
Cost-Effective
Raw materials, such as steel or aluminum sheets, are generally less expensive than solid blocks or castings. Additionally, sheet metal fabrication processes, such as laser cutting and CNC bending, have become more efficient and automated, reducing labor costs and increasing production rates.
High Accuracy and Precision
Sheet metal fabrication techniques have advanced significantly with the use of computer-aided design (CAD) software and computer numerical control (CNC) machines, allowing precise cutting, bending, and forming operations. This accuracy ensures consistent dimensions and tight tolerances, which is crucial in industries where precise fit and functionality are required.
Rapid Prototyping
With computer-controlled machines and efficient production setups, it is possible to quickly produce prototypes or small batches of sheet metal parts. This agility is particularly beneficial for industries that require fast product development cycles or have changing design requirements.
Short Lead Times
Sheet metal fabrication covers a range of processes. Working with a full-service contract manufacturer that handles fabrication, finishing, and assembly can drastically shorten your lead times.
Recyclable and Sustainable
Sheet metal parts, especially those made from materials like steel or aluminum, are highly recyclable. These parts can be recycled and reused to produce new sheet metal components, reducing environmental impact and promoting sustainability.
Sheet Metal Fabrication by Source International
Source International’s sheet metal fabrication capabilities can cover any project. Our full-service contract manufacturing model means we handle your project from product development all the way through shipment monitoring using our Source Information System (SIS). We will even develop a new process for you if we don’t have one that fits!
Our experienced team will work with you every step of the way to develop a product and create a process that fits your needs — all wrapped up nicely in our Product Tech Pack. This ensures you have all of the information on your product such as bill of materials, technical drawings, performance testing, sample schedules, and packaging labels.
Posted by Joe Simon on | Comments Off on SIS 6.0 RELEASED BY SOURCE IT GROUP
The Source International IT Team released the first version SIS 6.0 live online at 13:00PM May 8th, Beijing Time, and 1:00AM May 8th, USA Eastern Daylight Time)
The SIS 6.0 release is a huge makeover and simplification of the SIS Platform with increased digitation of operational and product data and enhanced speed and search ability. New Features and Enhancements Were Packed Into SIS 6.0!:
Project/product page the center of the SIS Universe was completely redesigned and re-formated.
2. Digitized the PSS/QAP (Product Tech Packs) in Product Module.
3. Updated Item # and Item Name on summary pages
4. Enhanced Replication. Supports replication of variable information from different items.
5. Automated order entry to import from pre-formated spreadsheet.
6. Updated Ship Date on Summary
7. Updated Logistics and Release shipment functions.
8. Add Tooling Refund information.
9. Add Factory Audit module
10. Update on CAP Module.
11. Digitize Inspection report and deploy in the field on smartphone devices.
12. Support to drag & drop to upload images, photos and other attachments.
13. More security and control.
14. More compatible and visible across all mobile devices.
15. Simplification.
Our cloud-based Supply Information System (“SIS”)platform helps our customers eliminate gaps in the product concept to delivery process and provides our whole integrated teams real-time, 24/7, end-to-end visibilityon the status of all supply chain activities through a private, secure, personal portals. Imagine having all of your product engineering, quotation, new product development, samples, purchase orders, production status, inspection reports, and shipping data at your fingertips anytime with the click of a button!
Source International’s SIS softwaremakes all the difference in meeting global manufacturing and supply chain management needs and being up-to-date about the status of each and every one of your products. After all, your products are the lifeblood of your business.
Contact us for more information on our SIS operating system platform and about how we can add value to your global supply chain.
Posted by Joe Simon on | Comments Off on ASIA MANUFACTURING COST DRIVERS REPORT | Q1 2019
Q1 – 2019 (Jan, Feb, Mar)
Executive Summary
The commodity price trends in the first quarter are mixed in Asia. Many grades of Rubber, Metals, Wood, Paper, Ceramics raw materials prices were mostly down in price. While some grades of Steel, Alum, Textiles and Fuel prices were all go up. Also Labor rates were up in the lower wage countries. The trend for World Container Index was down. Only Plastics prices were mixed. The US Dollar was down a little bit against most of the Asian currencies in Q1. China imports saw slightly up while exports saw an obviously decline in this quarter. The China PPI was steady, and the China CPI was up marginally. The PMI USA indexes saw slightly down in Q1 while PMI China and PMI Hong Kong saw marginally improvement. Below is a chart of the general trends and for all the details, please see the entire report.
Report Details
PLASTICS & RUBBER
– The General Purpose plastic prices were mixed in first quarter. PS (GPPS/688B) and PE (LD400/Injection) were down marginally, while PP (K8303), HIPS (PH88) and PP(Food Grade) prices were all slightly up, with HIPS (PH88) up most which is over 3%, the rest of General Purpose plastic prices were unchanged. Year over year, PE (LD400/Injection), HIPS (PH88) and PVC (S700) prices are down 8.5%, 5.2% and 2.1% respectively, while PP (K8303), HDPE (HHMTR210), PS (GPPS/688B) and PP (Food Grade) are up on the average of 3.9%. Only PET (SE-3030) in price is steady versus one year ago.
– Similarly, the first quarter of engineering plastic prices were mixed, except for PU Foam was unchanged, Nylon (PA66), Nylon (PA6) and ABS were up 3.1%, 2.7% and 1.4% respectively, while PL (L-1250Y) and POM were down marginally. Year over year, ABS in price is obviously down 10.6%, followed by PU Foam is faintly down 1.6%, while the other prices are up on the average of 4.6% versus one year ago.
– Most of the Rubber prices were down in Q1, SCR5 saw a little up which is over 2%. EPDM saw obviously down in price, which was over 8%. Latex, CR prices were all down over 2%, BR9000 was down marginally. NBR price was steady. Year over year, SCR5, Latex and NBR prices slightly up which are over 2%, while EPFM in price is down 8.3%, followed by CR down 3% and BR9000 down 2.6% versus one year ago.
METALS
– For the first quarter of 2019, most of the prices for Carbon Steel were up. Only Steel Wire in price down 2.3%. Hot Roll Steel Tube, Cold Roll Steel Sheet, Pig Iron and Hot Roll Steel Sheet were up on the average of 6.4%, while Cold Roll Steel Tube was steady. Year over year, Steel Wire and Cold Roll Steel Sheet were up 8.9% and 1.1% respectively. While Hot Roll Steel Tube, Hot Roll Steel Sheet and Cold Roll Steel Tube prices are all down slightly, which are over 4%. Pig Iron is unchanged in price versus one year ago.
– In the Stainless Steel part, most of the grades of prices were down in the first quarter, with 410, 420 and 201 in price down on average of 3.8%, but 304 in price was up marginally. The price of 430 was steady. Year over year, all the Stainless Steel prices are down, with 430 is down the most which is over 11%, followed by 420 is down 10%, and other grades of stainless steel prices are down on average about 4.1% versus one year ago.
– All aluminum prices were up faintly in the first quarter. Year over year, 6061 and A00 in price down 4.6% and 0.2% respectively, while the rest of grades in price are up slightly, with 1060 price up 3.5% and 3003 up marginally in price versus one year ago.
– In Other Industrial Metals, all grades trend was up in Q1. Nickel’s price was sharply up 16.6%, followed Brass Rod price up 7.3% and the rest of metals were up a little. Year over year, Nickel and Brass Rod metals prices are up 7.2% and 4.5% respectively. Other metals prices are down slightly, with Zinc price down most which is over 9% versus one year ago.
WOOD, PAPER & TEXTILES
WOOD, PAPER & TEXTILES – Wood prices were slightly lower in Q1, except for Beech Hardwood and Pine Softwood were steady in price, MDF price was down 3%. Year over year, Beech Hardwood and Pine Softwood are up marginally. While MDF price is down 3% versus one year ago.
– While most grades prices of Paper Materials were down in the first quarter, with Kraft and Art paper were both sharply down over 14%, and others were down slightly. Only Corrugated Board price was up 4.6%. Similarly, year over year, all grades of paper in prices are decreasing, with Art Paper enormously down over 18% and others prices down on average of 10.7% versus one year ago.
– Textile fabric prices saw a little change in the first quarter, with Raw Cotton price was up 1.1% in price. While the rest grades prices were steady. Year over year, the grade in prices are mixed, with 100% Polyester Fabric price is significantly up 21.4%, but Raw Cotton price is down 0.9%. The rest of Textiles prices are unchanged versus one year ago.
CERAMIC AND GLASS RAW MATERIALS
-In Ceramic Raw Materials, the grades in price were slightly down in Q1, with Soda Ash is obviously down 13.6% and Alumina slightly down 1.7% in price, other grades in price were steady. Year over year, Alumina and Glaze prices are both up marginally, while Quartz price is down 3.8%. Other Ceramic and Glass material prices are steady versus one year ago.
FUEL
Fuel prices in China were generally going up, with LPG , Diesel Oil and Natural Gas prices were obviously down in the range of 3% ~15% in the first quarter. However, Petroleum price was sharply down 15.4%. Meanwhile, year over year, except for Petroleum price is down over 15% , the rest fuels are up slightly in price between 6%~10% versus one year ago.
OCEAN FREIGHT
The World Container Index was sharply down 16.3% in the first quarter. To the contrary, year over year, the World Container Index is obviously up 13% versus one year ago.
COST OF LABOR
Most of the Asian labor rates were up in Q1, with Bangladesh rate was significantly up 50.9%, followed by Indonesia rate up 9.4%, Vietnam and China rates are up over 2%. Thailand rate is no change. Similarly, 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%), China (up 7.8%), Vietnam and India both up over 5%, while Thailand rate is unchanged.
CURRENCY EXCHANGE RATE
The World Container Index was sharply down 16.3% in the first quarter. To the contrary, year over year, the World Container Index is obviously up 13% versus one year ago.
For the first quarter, the USD was slightly weaker against the Thailand Baht, Indonesian Rupiah, India Rupees, China RMB, Chinese Yuan and Taiwan New Dollars, while slightly strength against Bangladesh Taka and Vietnam Dong. Year over year, the biggest gains for the USD are against the India Rupees and followed by China RMB, Taiwan New Dollars, Indonesia Rupiah and Vietnam Dong and while its slightly weaker against the Thai Baht.
CHINA TRADE (Data lags by one month)
– China Imports was slightly up 1.16% and Exports was obviously down 10.22% in the first quarter. To the contrary, year over year, China Imports is largely down 7.3 while Exports are sharply up 14.1 versus one year ago.
– The China Consumer Price Index (CPI) was faintly up 0.39% while the China Producer Price Index (PPI) is unchanged in the first quarter. Year over year, the China PPI is down 2.62% while the China CPI is up marginally versus one year ago.
PURCHASING MANAGERS INDEX (PMI)
China PMI and Hong Kong PMI were both down slightly. Only UAS PMI was slight down 0.18% in the first quarter. Year over year, China PMI, Hong Kong PMI and USA PMI are all down slightly, with UPS PMI down most which is over 8% followed by China PMI down 7.46% 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.
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.
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.
Posted by Joe Simon on | Comments Off on SOURCE XIAMEN CELEBRATES INTERNATIONAL WOMENS DAY
Source International’s Xiamen Office honored all its dedicated women staff on International Women’s Day March 8th. The day marks a special time to stop and say thanks to all the women on our life and all the love and beauty that they bring to the world every day. China has celebrated International Women’s Day for many years and for many its becoming a very special day to say thanks. In fact, Burger King China created an interesting campaign that we thought worth sharing.
Posted by Joe Simon on | Comments Off on ASIA MANUFACTURING COST DRIVER REPORT-2017 Q4
ASIA MANUFACTURING COST DRIVER REPORT-2017 Q4
In the fourth quarter of 2017, most raw materials in Asia continued their upward movement in price. Many grades of plastics, rubber, steel, other metals, wood, paper and ceramic raw materials all went up in price while aluminum and stainless steel and many grades of textiles moved down in price. Petroleum and fuel prices are all up in Q4 but Labor Rates and Ocean Freight rates both remained steady. The US Dollar lost a little bit of ground against most of the Asian currencies in Q4 about 1-3%. China imports and exports both saw significant increases in the quarter and, in addition, the China PPI and CPI and PMI indexes all saw a little drop in the final quarter of 2017. The general trends are represented on our handy chart and for all the details, please download the entire report.
PLASTICS & RUBBER
For the fourth quarter of 2017, prices for the General Purpose plastic resin were mixed with PP, PS, PP(Food Grade) and TPE up slightly (1%~2.7%) and EVA up in price by 8.3%, PET Fiber up by 6.2%. Prices, however, for HDPE down over 10% and PE, HDPE and PVC+DOTP were down in price marginally (0.5%~1.7%). Only PET (SE-3030) remained unchanged in Q4. Year over year, most plastic prices remain down in price versus one year ago. PE is down the most (over 15%) followed by PP, PS, PVC and PET which are down in price by 9.5%~12.5%. While Food grade PP and HDPE are up in price by 8.3% and 9.8% respectively versus one year.
Meanwhile all grade of engineering plastic resin prices were increased in Q4 between 5% ~ 10% with POM up the most over 9%. Year over year, PC is up a whopping 30% followed by POM up over 20% and PA6 up over 16%. However, Nylon and PU Foam are down over 5% and 12% each versus one year ago.
In the Rubber category, most of prices were up in Q4 except BR was down over 11%. CR was up in price sharply over 12% followed by EPDM up over 9% while rest of rubber only up marginally (2%~3.9%). Year over year, prices are mixed with Latex see a huge drop in price, down over 43% and BR is also down sharply over 37%. Moreover, SCR5 and NBR are also down slightly. On the contrary, CR increases a lot in price almost 45% and EPDM only go up a little.
METALS
Prices for Carbon Steel were all went up in Q4. Cold Roll Steel Tube ascended the most over 20%, the rest of steel up marginally between 3.6% and 12.5%. Year over year, the trend is more even, Cold and Hot Roll Steel Tube shoot up by 64% and 50% respectively and Pig Iron up significant over 23% versus one year ago.
On the contrary, all grades of Stainless Steel were down slowly in price in the fourth quarter between 0.6% and 4% with 201 grade down the most. Year over year, all grade of Stainless Steel are drop in price (2%~16%) versus one year ago.
Furthermore, all aluminum grades grow down in Q4 as well. Aluminum 6061 decreased 21% followed by Aluminum 3003 down in price 13%. Besides, A00, Aluminum 1060, ADC12 and A380 also drop between 4.5%-9.6%. Year over year, most of prices are up, only Aluminum 6061 down in price 8%.
However, in Other Industrial Metals, only Zinc Alloy’s price was down in Q4 while the rest of the metals were up in price. Year over year, all the metals prices are up by over 24% on average with Brass Tube up the most (almost 46%) versus one year ago.
WOOD, PAPER & TEXTILES
Wood prices inched slightly higher in fourth quarter. Year over year the prices trend is same with Beech Hardwood up over 5.0% and the rest up slowly 8%-5%.
In Paper Materials, prices were mixed in Q4. White and Gray Cardboard and Art Paper continued their rise, increase 1.4%, 2.6% and 9.6% respectively. Corrugated prices finally saw some relief in Q4 and dropped over 22% also Kraft paper dropped marginally 1.4%. Year over year, all paper prices remain higher except Corrugated Board goes down a little. Art Paper remaining up by over 45% in price while all the others are on average by 8%.
Textile fabric prices were mixed in Q4. Raw Cotton, Polyester and 100% Cotton Fabric grew down in Q4. 50% Cotton 50% Polyester up slightly and the rest were unchanged. Year over year, all prices remain higher, with NonWoven PP up in price the most at 8.3% and the rest up more modestly at 0.4% to 5.3% versus one year ago.
CERAMIC AND GLASS RAW MATERIALS
In Ceramic Raw Materials, Kaolin and Feldspar increased by over 6% in the fourth quarter and Quartz was up slightly, while Alumina price was dropped in price sharply by 19.5%. In Glass Raw Materials Soda Ash drop 8% and Glass Grade Sand up a little. Year over year, Soda Ash up rapidly over 48%, Kaolin and Feldspar are both up in price by over 10%, Quartz and Glass Grade Sand up on average 4% while Alumina is lower by 2.7% and Glaze remains unchanged versus one year ago.
FUEL
Fuel prices in China were generally on the rise in the range of 13.5% in Q4 and year over year, all fuels are up in price by 14.1% to 15% except Diesel Oil is unchanged versus one year ago.
OCEAN FREIGHT
Ocean freight rates were unaltered in fourth quarter.
COST OF LABOR
Asian labor rates were not changed yet. Year over year, rates are up in most countries with Indonesia up the most (over 8%) followed by Vietnam (up 7%), China (up 5%) and Thailand (up 1.7%) while India and Bangladesh saw little to no significant change.
CURRENCY EXCHANGE RATE
For the fourth quarter, the USD strengthened slightly against the Bangladesh Taka and Indonesian Rupiah and weakened so slightly against the Chinese Yuan, India Rupees, NT Dollars and Thailand Baht (about 2%). Year over year, the biggest gains for the USD are against the Bangladesh Taka and Indonesian Rupiah while its weaker against the Thai Baht, NT Dollar, China RMB, Indian Rupee and Vietnam Dong.
CHINA TRADE (Data lags by one month)
China Imports and Exports were both up significantly in the latest three months, increased by 9.1% & 12.7% respectively. Year over year, China Imports and Exports are also up by 16.4% and 5%.
The China Producer Price Index (PPI) and China Consumer Price Index (CPI) were both dropped slightly in the fourth quarter. Year over year, the China PPI is up over 8% while the China CPI is down by 0.3% versus one year
PURCHASING MANAGERS INDEX (PMI)
All the PMI Indexes have been dropped throughout the quarter but all were above 50. Year- on-year, China Federation of Logistics and USA’s indexes show upward trends indicating growth and an expanding economy while HSBC’s indexes is drop by 0.7%.
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.
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.
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.
Posted by Joe Simon on | Comments Off on HAPPY HOLIDAYS FROM SOURCE CHINA
HAPPY HOLIDAYS FROM SOURCE CHINA!
Santa made his annual stop at the Source Xiamen office this week to wish everyone a Merry Christmas and Happy Holiday Season. First, Santa conducted his annual Internal Audit to make sure all systems were in sync with the Source Standard Operating Procedure and Quality Management System and he logged into the Source Cloud SIS to check the status Quotes, New Product Development, Orders, Inspections and Shipments. Next, after confirming that there was no one on the “Naughty List”, Santa and his helpers distributed lots of goodies and gifts and stopped to pose with the team to take a photo before heading out in his sleigh to his next destination. As Santa left the Source China office, the bright nose of Rudolph could be seen glowing in the Xiamen sky and all the boys and girls heard him say…”Merry Christmas to All”!
Source International was founded in 1989 and has grown to become one of the largest supply management companies in North America providing global manufacturing and supply management services from our US headquarters located in Louisville Kentucky and operational headquarters, Source China, located in Xiamen, Fujian Province, China.
Source International applies American engineering and quality standards to offshore manufacturing delivering partnerships for our customer’s success. With close to three decades of experience, Source has been responsible for over $4 Billion in shipments from Asia and has achieved industry-leading metrics for on-time shipments with extremely low defect rates. Our proprietary cloud based platform, Source Information System (SIS), that helps customers eliminate the gaps in the product concept to delivery process and provides real time, end-to-end visibility on the status of all supply chain activities through a private secure portal. From the web site at a click of the button, our customers have at their disposal information on all engineering data, product quotations, new product development, product samples, specific purchase order production status, product inspection reports and shipping data for all products.
When you partner with Source International, we make sure that there are no misunderstandings about manufacturing standards or concerns about raw material availability or quality and no substandard workmanship or delivery logistics black holes. We are your eyes and ears and boots on the ground in Asia to guide you through what is, for us, familiar territory. Our experience and established procedures eliminate unpleasant surprises for you. And at all times, you are in control.
While our size and volumes have steadily grown over the years we remain totally dedicated to exceeding the expectations of our customers. So, harness the competitive power of global manufacturing through Source International and give your company the competitive edge. We welcome the opportunity to show you how we can add value to your supply chain just like we’ve done for our other satisfied customers throughout the years.
Very best wishes from everyone at Source China and Source USA for a most Happy Holiday Season and a Successful and Prosperous New Year!
Posted by Joe Simon on | Comments Off on MADE IN CHINA QUALITY IS CHANGING
For years, Made In China meant be weary of quality. And, while there are still many manufacturing plants that require close supervision and policing to make sure the quality is acceptable, China entered a new era with the maiden flight recently of the China’s large passenger jet C919. The flight lasted around 2 hours testing the performance of the C919 major systems and equipment, such as taking-off and landing, navigation and communication, speed acceleration and deceleration. The first C919 made its maiden flight in May of this year and it conducted its first intercity test flight in November. The CAAC (Commercial Aircraft Corporation of China) plans to produce six aircraft for flight testing to eventually compete with the Airbus 320 and Boeing’s new generation 737.
See the entire story on Xinhua News at the link below:
Posted by Joe Simon on | Comments Off on ASIA MANUFACTURING COST DRIVERS REPORT-Q2, 2017
ASIA MANUFACTURING COST DRIVERS REPORT
Q2 – 2017 (April, May, June)
Tracking The Trends Which Drive Costs In Asian Manufacturing
PLASTICS & RUBBER
All General Purpose plastic resin prices were down in the second quarter, PP(K8303), Food Grade PP, PE and PS down significantly (on average about 10.5%) and the others only down in price marginally. Year over year, PP(K8303) and Food Grade PP prices are down over 17% and 22% respectively, but most plastic prices remain up in price versus one year ago. HIPS is up the most (close to 25%) followed by PVC up 14% and HDPE up 7.5% and the others going down by small amounts.
Engineering plastic resin prices were more mixed with POM and PC prices up by 5% & 6% respectively, while Nylon, PA6 and PU Foam were down by 7% on average. Year over year, ABS is up in price the most at 35% followed by PC and PA6 up over 20% and the others only up in prices marginally while POM is the only grade which remains unchanged in price versus one year
Most of the Rubber prices were down in Q2, BR saw a huge drop in price, down over 35% and SCR5, Latex, EPDM prices all down over 10% and NBR down a little. CR is the only one which was up in price (close to 6%).Year over year, except for Latex which is lower in price over 51%, CR price is up over 53% and BR, SCR5, NBR are all up on average 15 % and EPDM up over 3% versus one year.
METALS
For the second quarter of 2017, prices for Carbon Steel were mixed, with Pig Iron and Cold Rolled Steel Plate down an average of 13% and Tinplate and Cold Roll Steel Sheet down an average of 4.4%. Prices, however, for Hot Roll Tubes and Cold Roll Steel Tube were up in price by over 18% while Hot Roll Steel Sheet and Steel Wire were up a little. Year over year, the trend is more even with all grades of Carbon Steel up double digits over 44% on
In the Stainless Steel part, most grades were down in price between 5% – 16% with 201 grade down the most while 202 grade up a little in the second quarter. Year over year, the trend remains up with most grades of stainless steel up in price on average about 11% versus one year ago. Except for 304 grade down close to 15%.
Most aluminum grades rose in price 0.6% in the second quarter while ADC12 and A3380 were down close to 2%, and year over year, most prices are up between 3 and 7% while A380 is down over 2%.
In Other Industrial Metals, only Brass Tube’s price was down in Q2 while Nickel and Zinc was down by 8% &3% and the rest of metals were down marginally. Year over year, most metals prices are up over 20% except Nickel’s price is down slightly versus one year
WOOD, PAPER & TEXTILES
Wood prices inched slightly lower in Q2 except Beech which was up 3%. Year over year, Beech’s price up over 7% and the others only up
Meanwhile all grades of Paper Materials were up in price in the second quarter with Art Paper up in price by 13% followed by Gray Cardboard and White Cardboard up by 4%&5% respectively and the rest up in price marginally. Year over year, all paper prices remain higher, with Art Paper remaining up by almost 26% in price while Gray and White Cardboard are up almost 19%&15% and the others are on average by 2%.
Textile fabric prices saw little change in the second quarter with Raw Cotton, 100% Cotton Fabric and Poly/Cotton Fabric up slightly and the rest were unchanged. Year over year, all prices are higher, with Raw Cotton and 100% Polyester Fabric PP up in price the most at 21% and 13% respectively and the rest up slightly versus one year
CERAMIC AND GLASS RAW MATERIALS
In Ceramic Raw Materials, only Alumina prices was up slightly, while in Glass Raw Materials Soda Ash was down in price over 7% and Glass Sand marginally. Year over year, Alumina is up in price by over 32%, followed by Feldspar and Kaolin up 7%&2%, while Glass Grade Sand is lower over 15% and Quartz down in price marginally versus one year ago.
FUEL
Fuel prices in China were generally going down in the range of 21% in the second quarter and year over year, all fuels are up in price with Industrial Electric up significantly over 21% followed by Natural Gas and LPG Gas up on average 7% versus one year ago.
OCEAN FREIGHT
Ocean freight rates haven’t been updated yet in Q2.
COST OF LABOR
Asian labor rates saw little change in the second quarter with China Labor up almost 5% and the rest remained unchanged. Year over year, rates are up in most countries with India up the most (over 9%) followed by Indonesia (up 8%), Vietnam (up 7%), China (up 5%) and Thailand (up 1.6%) while Bangladesh saw little to no significant change.
CURRENCY EXCHANGE RATE
For the first quarter, the USD strengthened slightly against the Bangladesh Taka and weakened ever so slightly against the Chinese Yuan and Vietnamese Dong with the Thai Baht, NT Dollar and Indian Rupee stronger by about 5%. Year over year, the biggest gains for the USD are against the China RMB, Bangladesh Taka, Vietnam Dong and Indonesia Rupiah while its slightly weaker against the Thai Baht, NT Dollar and Indian Rupee.
CHINA TRADE (Data lags by one month)
China Imports and Exports were both up significantly by 16% & 59% respectively in the latest three months. Year over year, China Exports are up by almost 14% and China Imports are up by over 5%.
The China Producer Price Index (PPI) gone down 2% in the second quarter while the China Consumer Price Index (CPI) rose slightly. Year over year, the China PPI is up over 8% while the China CPI is down slightly versus one year
PURCHASING MANAGERS INDEX (PMI)
All the PMI Indexes have been climbing steadily throughout the quarter and all were above 50 at the end of the quarter. Year-on-year, all indexes show upward trends indicating growth and an expanding economy.
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.
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.
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.
Posted by Joe Simon on | Comments Off on WVU SUPPLY CHAIN MANAGEMENT ADVISORY COUNCIL TO MEET APRIL 2017
WVU Supply Chain Management Advisory Council
The WVU Supply Chain Management Advisory Council, chaired by Jim Lynch, is planning a spring meeting on April 27, 2017 as part of the Joint B&E Council Meeting to be held at the Erickson Alumni Center on the West Virginia University campus in Morgantown, West Virginia. The Council and advises and interacts with students in the recently established WVU Global Supply Chain Management Program and has been instrumental in the development of the program led by Professors Ednilson Bernardes and John Saldanha under the direction of Javier Reyes, the Milan Puskar Dean of the WVU College of Business and Economics.
The WVU Global Supply Chain Management program welcomed over 60 new students in the Fall 2016 class and the interest among students on campus at WVU and across the world is growing. The Fall 2016 group represents the last incoming class of students pursuing the area of emphasis and the first incoming class of students pursuing the major. In addition to numerous interactions with Supply Chain Management Council members, the students in the WVU Global Supply Chain Management program have also interacted this fall with peers at the University of Pittsburg, GM/Wayne State, and Michigan State University and had the opportunity to visit the GM DHAM plant.
For more information on the GSCM program please contact the WVU College of Business & Economics at (304) 293-4959 or check online WVU Global Supply Chain Management Program.
Posted by Joe Simon on | Comments Off on LIBBEY INTRODUCES NEW WORLD TABLEWARE COLLECTION- NATURAL DINNERWARE
New Driftstone and Pebblebrook mix and match for an artistic tabletop presentation
Libbey®, provider of complete tabletop solutions for its foodservice partners, unveils Driftstone and Pebblebrook patterns in its World® Tableware collection. Both patterns depict the organic, artisanal trend popular in culinary presentations today. Driftstone and Pebblebrook bring a natural visual to the tabletop, mimicking the colors of rivers and precious earthy gemstones. Each pattern is easily mixed and matched with other tableware for a stunning presentation.
Driftstone helps build a peaceful, eye-catching tabletop with river inspired colors. This pattern features a matte satin glaze finish, worn into a resilient smoothness. Neutral earth tones of onyx, sand, driftwood and granite create unique mix and match options. Available in plates, bowls, platters, cups and mugs, Driftstone offers organic-inspired versatility to the tabletop.
Inspired by the silky luster of a polished jewel, Pebblebrook shines like a Tiger’s eye. The multi-layered color glaze process produces a unique, hand-crafted look and no two items look exactly the same. Available in both organic and coupe shapes, Pebblebrook includes plates, bowls, platters and mugs.
Both patterns are made from fully vitrified porcelain body for durability and strength. Plus, each piece includes a glazed foot, allowing plates to be stacked without scratching.
“As artisanal and organic-themes continue to grow as trends, guests are seeking a more natural aesthetic when it comes to dining,” said Susan J. Dountas, director of foodservice marketing for Libbey Inc. “The unique pieces of Driftstone and Pebblebrook use natural beauty to create a refined tabletop.”
About Libbey Foodservice
Libbey® Foodservice, a division of Libbey Inc., sets the standard in the foodservice industry for design, quality and service. Offering a full spectrum of inspired tableware products from fine dining to casual, it manufactures and distributes the complete tabletop, including Libbey Glassware and Master’s Reserve®, a collection of premium glassware; Syracuse® China dinnerware; and World® Tableware dinnerware and flatware. In addition, Libbey Foodservice distributes the Artistry Collection™, which includes SCHÖNWALD dinnerware, Spiegelau and Nachtmann glassware, and Reed & Barton flatware, in select markets. For more information, visit libbey.com.
About Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the United States, Mexico, China, Portugal and the Netherlands. In existence since 1818, the company supplies tabletop products to retail, foodservice and B2B customers in over 100 countries. Libbey’s global brand portfolio, in addition to its namesake brand, includes Crisa, Royal Leerdam, Syracuse China and World Tableware International. In 2014, Libbey Inc.’s net sales totaled $852.5 million. Additional information is available at libbey.com.
Posted by Joe Simon on | Comments Off on CHRISTMAS GREETINGS FROM SOURCE XIAMEN!
SOURCE CHRISTMAS PARTY!
The Source Xiamen office held a festive Christmas Party on Friday, December 23 with Santa, presents and snacks. Warmest Christmas greetings to all our customers and supplier partners. We are deeply thankful for your friendship, cooperation and support during the year and look forward to a great year in 2017! And, don’t forget that our annual Lunar New Year party is scheduled for Saturday, January 21 so mark your calendars and come visit us! Happy, Happy, Happy!
Posted by Joe Simon on | Comments Off on G20 Summit Kicks Off In Hangzhou China This Weekend
At the G20 Global Summit in Hangzhou, the BBC asks “what are China’s ambitions for global leadership?”
Xi JinPing delivers a powerful speech but is it just words or is China really ready to stand behind its words and step up to show real Global leadership and defend free trade?
The G-20 or (Group of Twenty) is an forum for the leaders from 20 major economies to study, review, and promote high-level discussion of policy issues pertaining to the promotion of international financial stability. The members include 19 individual countries along with the EU. The G20 countries represent about 70% of the world’s population and collectively have a combined GDP that account for around 80-90% of the world’s GDP and over 75% of worldwide trade.
Posted by Joe Simon on | Comments Off on Asia Manufacturing Cost Drivers Report – 7/16
Asia Manufacturing Cost Drivers Report – July 2016
Asia Manufacturing Cost Drivers – Summary
In regards to Asia Manufacturing Cost Drivers, July saw a couple tracked commodities post large increases in price. The largest being Cotton, posting a 17% gain since last month’s report. Nickel also saw big gains of over 10%. General Plastics were mainly down slightly, while Engineered Plastics remained steady. Steel & Iron prices were mainly up, in many cases over 8%, although two tracked varieties saw an over 9% drop in price. Aluminum was down negligibly across the board. China Labor rates continued their upward trend with an over 1% increase since June. Fuel and Power rates were down an average of 6%, while Currency Rates mainly continued to appreciate against the dollar. Although the USA PMI trended down about 1% this past month, the HK PMI was up over 4%—this marks good news for HK as it had been trending downward for sometime. China Imports were up around 1%, while Exports declined almost .5%. For further details, please see the entire report that follows.
Manufacturing Cost Drivers – Commodities
General Plastic prices remained flat or trended downwards in July with the exception of PVC which posted gains of nearly 3%. Both tracked varieties of PP were down nearly 5% while injection grade PE was down 1%. General Plastic Prices are now trending down more than up year on year with most varieties showing at least a 4% drop. Food Grade PP and High Impact PS are trending most favorable for manufacturers with 19% and 7% decreases, respectively. General Purpose PS has increased 9% for the year and PET is up almost 4%.
There is nothing to report on price fluctuations during this period for Engineering Grade Plastics as all prices remained flat. However, as far as year on year prices are concerned, PA6 is still trending down nearly 40%, while Nylon is down almost 10%.
Rubber Blanket prices posted a modest increase of just over 1% during the reporting period, while Synthetic Rubber jumped nearly 5%. All other tracked types of Rubber remained steady with the exception of Latex which posted a favorable downward trend of nearly 3%. Rubber prices in the last year are over 18% lower on average.
Carbon Steel prices mainly posted increases this month, some rather significant, with the exception of Hot Roll Steel Sheet and Steel Wire which both trended downward just over 9%. The biggest gainers were Cold Roll Steel Sheet and Hot Roll Steel Tube both posting over 8% increases in price since the June report. Year over year, Carbon Steel prices are a bit of a mixed bag with Hot Roll Steel Sheet and Steel Wire posting increases of 24% and 38%, respectively, while varieties such as Cold Rolled Steel Plate and Pig Iron are down 13% and 17%, respectively.
The Stainless Steel market mainly remained flat with the exception of Stainless Steel Sheet 201 trending down around 2% and Stainless Steel Sheet 304 trending up nearly 2%. Over the past six months, Stainless Steel prices continue to trend upwards and realize gains of just over 6% in overall quoted price.
In a marked departure from yearly trends, Aluminum prices all trended down this month with most tracked varieties posting approximately quarter percent decreases in price. The biggest decreases in price were realized in the ADC12 and A380 types of the material, which both posted just over 2% declines. Most types of the material continue to trend upwards year over year around 5% with the biggest increase in price still being that of Aluminum 6061 which is up around 38%.
In other metals, prices continued to increase across the board for the month of July. Nickel, again, posted the largest gains during the reporting period with an over 10% increase in price. The continued large increase in pricing for Nickel this month has now put it yearly even for the year just being down a little over 1%. The other largest increase was realized in the Zinc Alloy market and posted a gain of nearly 5%. Other tracked metals posted modest gains in price and continue to trend downward for the year, in most cases nearly 10%.
Wood prices remained the same and continue to be about 2% lower on average than a year ago. The only exception to this is MDF Board, which has remained completely unchanged all year.
Paper prices remained unchanged in July as they have for the past six months with the exception of Corrugated which is up nearly 1%. Kraft is down nearly 5% year on year while Art Paper is down nearly 4%.
Textile Fabrics trended up across the board in July with Cotton posting a tremendous increase of nearly 17%. July’s increase now puts Cotton prices up over 13% year over year. 100% Polyester and Non-Woven PP both saw increase of over 4% during the reporting period, although Polyester is still down nearly 33% for the year.
Ceramics prices remained unchanged in July. With the exception of Quartz, which is up about 6% for the year, Feldspar, Kaolin, and Alumina are all down posting decreases of 7%, 5%, and 20%, respectively.
Manufacturing Cost Drivers-Labor, Fuel, Freight, and Currency
Asian Labor Rates in Bangladesh and Thailand stayed flat during the reporting period as they have all year to date. China labor rates posted an increase of a little more than 1% and are now up over 2.5% year on year.
Fuel and Power prices were down across the board this past month with China Petroleum, Natural Gas, and LPG Gas all posting decreases of over 7%. Year on year fuel and power prices continue to show decreases in pricing of anywhere from 4% to 28%.
Ocean Freight rates remained flat during the reporting period potentially finding a current equilibrium compared to the large decreases over the last several months. Much of the overall capacity still remains unfilled, so any increases this year seem unlikely. Year over year Freight rates to the east and west coasts are down 21% and 43%, respectively.
With the exception of VND, all tracked Currencies appreciated against the USD in July with INR posting the biggest gain of over 1%. CNY and BDT posted modest gains against the USD, while TWD and THB hovered around 1%. The EUR continued to depreciate against the CNY and fell another .7%.
Manufacturing Cost Drivers-Key Indexes
While the Mainland China PMI index again remained fairly stable in July, the Hong Kong PMI index shifted upward to 50.6 posting an over 4% gain since June. The USA PMI decreased from 53.2 to 52.6 marking a just over 1% change.
While China Imports rose just under 1% for the month of July, Exports lagged behind and fell nearly .5%. It should be noted this data lags behind one month.
The China Producer Price Index (PPI) was up again recording a 0.2% gain while the China Consumer Price Index decreased 0.1%. The China PPI is now up over 2.3% for the year while the China CPI is up 0.5% for the year. These continue to be positive indicators for the Chinese economy as a whole despite slower growth than in years past.
For additional details on Asia Manufacturing Cost Drivers, exact figures or questions, please refer to the charts that follow or contact one of our Operations Specialists for more information.
Posted by Joe Simon on | Comments Off on Asia Manufacturing Cost Drivers – 5/16
Source International Asia Manufacturing Cost Drivers Synopsis – May 2016
Commodity Prices
General Plastic prices were some of the only commodities to see an increase in the month of May. General Purpose PP prices increased 3% for the month and continued an upward trend over the past six months approaching a nearly 33% increase. PET and General Purpose PS prices also saw increases of 2% and 0.9%, respectively. Food Grade PP and HDPE prices remained flat during the reporting period, while PVC realized a modest gain of 0.5%. Year over year, most tracked varieties of General Plastic are down, sometimes in excess of 20%, while other varieties have seen gains, in some cases, of nearly 11%.
Engineering Grade Plastics either saw a decline or remained flat during May. The largest decline was again seen in the PA6 market with an overall decrease in price of 10%, while both ABS and POM remained flat as they have for the past six months. Excluding ABS, which has seen an increase of about 4% for the year, year over year prices are also all down significantly or flat with PA6 now down 40%.
Although most Rubber prices saw substantial increases in price last month, all tracked varieties were down a minimum of 6% in May. Decreases in Rubber prices for May ranged from 6% for Rubber Blanket to 13% for Tire Rubber. Prices for Rubber in the last year are now 25% lower on average across the board.
Carbon Steel prices dropped sharply in May. Cold Rolled Steel was down anywhere from 18% to 19%, while Hot Rolled Steel saw decreases ranging from 8% to a hefty nearly 17%. In the past six months, Carbon Steel prices have seen an average increase of 24%, although Pig Iron is down 14% during the same timeframe.
Stainless Steel prices were all down or flat during the reporting period. Decreases in Stainless Steel ranged from 0.3% to almost 8% with Stainless Steel Sheet 304 registering the largest decline. Over the past six months, Stainless Steel prices have been up an average of 5% across the board.
Aluminum prices appeared to stabilize after large increases over the past 3 months. Aluminum prices were down slightly in May but no more than 2% for any given type. Aluminum 6061 is up about 36% year over year while other tracked types are down slightly. The six month average price increase in the Aluminum market is 19%.
In other metals, Zinc Alloy saw a very slight decrease in price of 0.6% while Brass Tube and Brass Rod decreased about 3% each. Copper was down more than 5% while Nickel experienced an 8% drop. With the exception of Zinc, which is down slightly, all other metals are down significantly year over year with Brass Tube, Brass Rod, and Copper down around 20% and Nickel down a whopping 35%.
Wood prices remained the same and continue to be about 2% lower on average than a year ago. The only exception to this is MDF Board, which has remained completely unchanged all year.
Paper prices remained unchanged in May as they have for the past three months. Gray Cardboard has shown an almost 5% gain year over year despite prices remaining unchanged for over six months. Kraft is down nearly 5% during the past six month period.
Textile Fabrics were largely flat with the exception of Cotton, which went up 0.8%, and Polyester Fabric which fell nearly 4%. Year over year most fabrics have remained flat, however Cotton has seen an almost 8% drop and Polyester Fabric has realized a 33% decrease.
Excluding Alumina, Ceramics prices remained unchanged in May. Alumina reversed its upward trend in pricing mentioned in the April report and lost almost 3%. With the exception of Quartz, which is up about 6% for the year, Feldspar, Kaolin, and Alumina are all down posting decreases of 6%, 4%, and 25%, respectively.
Labor, Fuel, Freight, and Currency
Asian Labor Rates in China, Bangladesh, and Thailand stayed flat during the reporting period. In fact, Labor Rates in these markets have remained flat all year with the exception of China which has posted an increase of 2%.
Excluding China Diesel which rose nearly 2%, the Fuel and Power sector continued to see downward trends in pricing, although the market in general does seem to be stabilizing from the large decreases of roughly 30% across the board seen just six months ago. China Petrol decreased 5% while Natural Gas and LPG Gas went down 5% and 3%, respectively.
Ocean Freight rates remained flat during the reporting period potentially finding a current equilibrium compared to the large decreases over the last several months. Much of the overall capacity still remains unfilled, so any increases this year seem unlikely. Year over year Freight rates to the east and west coasts are down 21% and 43%, respectively.
With the exception of the Euro, which rose a little more than 1%, all Asian Currencies saw decreases in the value of their currency. The Chinese Yuan was down almost 2% compared to the US Dollar, while the Thai Baht was down over 2%. Tracked Asian Currencies are down more than 4% year over year.
Key Indexes
Both China PMI Indexes remained stable in May with a slight 0.2 drop in the Hong Kong index to 49.2. Although the USA PMI increased from 50.8 to 51.3, with the Hong Kong index now being under the 50 benchmark and China and the US hovering close to 50, we still could see further contraction in these economies.
China Imports and Exports were a mixed bag. Imports saw a nearly 3% decrease while Exports rose a healthy 7%. Year over year Imports are down 10% while Exports are down 2.0%. It should be noted this data lags behind one month.
The China Producer Price Index (PPI) was up again recording a 0.9% gain while the China Consumer Price Index remained flat. The China PPI is now up over 1% for the year while the China CPI is up 0.8% for the year. These continue to be positive indicators for the Chinese economy as a whole.
For additional details or questions, please refer to the charts that follow or contact one of our Operations Specialists for more information.
Posted by Joe Simon on | Comments Off on Source International Wins 2015 Outstanding Vendor Award
Libbey (LBY) the No. 1 glassware company in the Americas and one of the largest tableware suppliers in the world celebrated Source International with their 2015 Outstanding Vendor Award. Michael Bunge the Libbey Director of Global Sourcing presented the award to the Source-Libbey Team at the Source International annual banquet held at the Weston Hotel in Xiamen, China on January 28, 2016. The award celebrated an exciting year of achievements for both companies and their long standing supply management partnership.
Source International has proudly served Libbey since 2008 managing the supply of its extensive line of high-quality tableware and home decor items produced in Asia. As one of the largest global manufacturing management companies in North America, Source International applies supply chain management best practices and American expertise to foreign manufacturing, giving customers all the benefits of substantial cost savings and a diverse supply base, coupled with systems and methodology that assure specifications and standards are matched or exceeded.
LIBBEY IS THE NUMBER ONE GLASSWARE COMPANY IN THE AMERICAS
In addition to its namesake brand, Libbey’s global brand portfolio also includes: Crisa & Royal Leerdam. Check out the entire Libbey Line at www.libbey.com
