Our sourcing team has been tracking the costs of China raw materials for well over a year to help importers buying common materials for their products in China keep tabs on the market. If your supplier suddenly blames material costs for a price increase, perhaps you can use this information to challenge them!?
At least, it will allow you to plan ahead if prices for your essential materials seem to be increasing (for instance, you may decide to buy up some inventory in advance to insulate yourself from further rises).
Here’s the up-to-date material cost data from China for you as of late August 2022 and the price evolution since Jan ’21 which has remained relatively stable at a higher point below a 50% increase, for the most part:
Let’s go through the materials and see their monthly cost changes and the notable reasons for them:
Epoxy Resin: – 2.19%On-site stockholders’ offers are raising and the industry’s installation load rate has dropped slightly recently.
ABS: – 0.19%The oil and styrene markets have declined and the high-temperature weather is affecting this industry. Downstream construction has been insufficient and actual demand for spot purchasing was weak.
Silicone: + 1.76%The raw material silicon metal has also been affected by high temperatures and reduced production in the main producing areas of Yunan and Xinjiang, so supplies have been very tight and the price has rebounded accordingly.
Zinc alloy: + 9.35%Prices increased as the largest zinc smelter in Europe announced upcoming maintenance and market turnover is not good.
AL alloy: + 5.97%Aluminum costs have risen and downstream manufacturers mainly order on demand.
PVC: – 2.49%Market prices decreased, and downstream purchasing enthusiasm was low and market transactions were only mediocre.
- Paper for color boxes -4.06%
- Paper for cartons -4.79%
Stainless steel: – 7.47%
The stainless steel spot market price decreased whilst the market atmosphere remains usual.
- Batteries (lithium cobalt oxides) -6.16%
As you may know, manufacturing activity in China is somewhat depressed these days, perhaps exacerbated by energy problems and a lack of demand for goods from abroad. These points could be the reason for the few notable cost increases. Namely zinc and aluminum alloys, as well as silicone which has been accelerating a little.
How to combat the 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.