Plastic, Silicone, Steel, and Others: Updated China Raw Materials Costs (late August ’24)

Here’s the monthly update from Sofeast’s sourcing team, tracking the costs of commonly used raw materials from China for the past year to help you understand where the market is right now. If you or your supplier are purchasing materials from China for your products, the cost changes you see here impact your bottom line!

Here’s the up-to-date material cost data from China for you as of late August 2024 and the price evolution over the past twelve months – this month Silicone and AL alloy had modest increases, while PVC and Lithium batteries’ costs decreased, especially the latter.

Here you can see the individual cost evolution per material over the past year, including the weekly and monthly changes for August 2024 with costs in CNY:

Here is what our market analysts attribute these changes to during this past month:

Epoxy Resin – decreased by 0.31%

The price of epoxy resin is expected to fluctuate slightly soon due to the following factors:

• Supply: Factory operations are stable and production levels are consistent, with careful attention to on-site operations.
• Demand: Downstream demand is tepid, with buyers showing limited interest.
• Cost: Prices of key raw materials, bisphenol A and epichlorohydrin, have risen slightly, providing modest cost support.

ABS (Acrylonitrile Butadiene Styrene) – increased by 1.35%

The ABS market is anticipated to remain stable with minor fluctuations:

• Cost: Styrene and butadiene prices have increased slightly, while acrylonitrile remains stable, providing continued cost support.
• Supply: Overall supply is sufficient, though some areas may experience localized shortages.
• Demand: Downstream demand for replenishment is moderate, with average transaction levels.

Silicone – increased by 2.97%

Silicone prices are expected to remain stable due to these key factors:

• Supply: Increased export volumes from major Shandong manufacturers, with a stronger willingness to ship.
• Demand: Downstream demand remains weak, with limited purchasing activity.
• Cost: The price of metal silicon 421 is consolidating at a low level, and the cost of methane chloride has decreased, providing minimal support to the DMC market.

Zinc Alloy – increased by 1.09%

Current zinc alloy market prices are influenced by:

• Supply: Overall supply is sufficient, though attention is needed on potential production cuts by smelters.
• Demand: Market demand remains limited, with weak overall activity.
• Mindset: Rising futures prices have improved market sentiment.
• Cost: Low processing fees, but cost support is present.

Aluminum Alloy (AL Alloy) – increased by 3.02%

The price of aluminum alloy is expected to remain strong and volatile:

• Macro Factors: Chinese economic data and anticipated Federal Reserve interest rate cuts continue to support the non-ferrous metals market.
• Supply: High production levels at aluminum plants, with abundant supply. Aluminum ingot inventories are high but are being reduced gradually.
• Demand: Slight improvement in demand, with increased terminal orders and stable aluminum exports.

PVC (Polyvinyl Chloride) – decreased by 3.33%

Key factors influencing PVC prices include:

• Macro Factors: A looser macroeconomic environment, with expectations of a U.S. interest rate cut in September.
• Supply & Demand: Increased maintenance activities at production facilities have reduced supply, while downstream demand remains weak. Export support is present due to an extended BIS certification.
• Cost: The price of calcium carbide has risen slightly, but the integrated chlor-alkali-PVC process still yields profit, offering limited cost support.

Paper for Color Boxes – decreased by 1.23%

The price of double-coated paper is expected to remain stable due to:

• Demand: Dealer sentiment is cautious, with limited willingness to replenish stock. Downstream purchases are limited to immediate needs, providing no significant demand boost.
• Cost: The wood pulp market has stabilized, offering moderate cost support for paper prices.

Paper for Cartons – decreased by 1.50%

The market for carton paper is generally stable:

• Supply & Demand: Paper mills have announced price increases, boosting market confidence slightly. However, downstream orders remain stable, and demand for materials is moderate.

Stainless Steel – decreased by 0.49%

The stainless steel market is impacted by:

• Supply: Production profits are shrinking, potentially reducing manufacturing activity, though inventory levels remain high, maintaining supply pressure.
• Demand: End users are purchasing on an as-needed basis, resulting in flat market digestion and no significant increase in demand.
• Cost: Nickel prices have risen in both futures and spot markets, providing continued cost support.

Lithium Batteries – decreased by 8.49%

The lithium battery market is characterized by:

• Cost: Mixed cost factors, with weak ammonium prices but strong phosphoric acid prices, leading to no significant impact on overall costs.
• Supply & Demand: Stable supply and demand, with normal digestion by downstream enterprises and on-demand production by suppliers.
• Market Outlook: The upstream and downstream support for iron phosphate remains stable, with steady spot market prices and stable negotiations.

How to combat rising costs?

Explore cost-reducing tips in this post: Rising Raw Material Prices: What Strategy To Follow? (6 Approaches).

What to do if your Chinese supplier suddenly tells you that material costs have risen: How To Cooperate With Your Chinese Supplier, Part 16: Bad News from China, Raw Material Prices Just Increased!

If your supplier just isn’t working out, maybe sourcing a new supplier will help you find one who can offer you better prices and more. If so, there’s no need to fear switching from your current supplier to a new one if you’re prepared: How To Switch To A Newer, Better Chinese Manufacturer? [eBook].

We hope this is helpful. Our mission at Sofeast is to help importers have transparency in their supply chain and to give them more control. And this information is critical to have some visibility into your manufacturer’s costing.

By the way, you can always contact us if you have any questions about whether a manufacturer’s quote is reasonable.