sofeast china raw materials price indicesHere’s the monthly update from Sofeast’s sourcing team who has been 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 that you see here do have an impact on your bottom line!

Here’s the up-to-date material cost data from China for you as of late July 2023 and the price evolution over the past twelve months:

raw material cost evolution since jul 22 china raw material cost changes jul 22 to jul 23 This graph shows the cost evolution for one year and as you can see, the costs are stable across all materials, except for batteries, where the price has reduced drastically over the past 12 months.

The graph below shows the cost fluctuation for the past year with the maximum, minimum, and averages for each of the materials.


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

Epoxy resin (epoxy refers to E-51) – cost increased 10.27%

This week, the epoxy resin market has shown a mild upward trend after weak operations. The weekly average price of solid resin has decreased slightly from last week. Production equipment utilization rates have remained relatively stable, and the focus of bisphenol A negotiations has shifted to higher levels. 

Another raw material, epichlorohydrin, has continued to rise after a period of stability. The rising cost of epoxy resin has supported the industry’s sentiment.


ABS (AG-15E1) – cost increased 2.58%

The ABS market has been weak in recent days. The supply has continued to increase, while demand for replenishment has cooled down. This mismatch between supply and demand has dragged down market confidence and led to a slow pace of spot negotiations. 

Some manufacturers have begun to accumulate inventory, and the sales pressure of new orders has increased. However, in the near future, chemical commodities are expected to continue to run strong. This, combined with the rising trend of costs, will likely squeeze ABS profits. In the short term, the ABS market is expected to remain weak and volatile.


Silicone (110) – cost decreased 8.47%

Domestic 110 rubber market prices fell this week, with all news pointing to a downward trend. The price of raw material DMC continued to fall during the week, shifting the cost center of gravity and affecting the resonance decline in the price of raw rubber.

The downstream rubber market demand has not seen significant changes. Due to a lack of orders, raw rubber producers continue to operate in a small-scale, on-demand mode.

The price of raw rubber continued to fall by 500 yuan/ton this week due to poor availability at main factories. This has left the market in a cost-inversion situation.

Because raw rubber has experienced the most significant price loss among parallel products, most producers cannot follow the fall. The situation of reducing production is still common.


Zinc alloy (Zamak5) – cost increased 2.07%

Spot zinc prices rose recently, mainly due to higher futures prices. The market sentiment is warm, and traders are shipping goods normally. However, trading activity is weak, and spot premiums have declined. Downstream buyers are mostly in a wait-and-see mode, and take-up is very limited.


AL alloy (ADC 12) – cost increased 3.40%

The main reasons affecting the current spot aluminum price trend are as follows:

  • In the first period, the arrival of aluminum in some areas was less, and inventory returned to the warehouse. This tightening of supply supported the upward trend of aluminum prices.
  • The domestic economic meeting was held, and it was proposed to focus on expanding domestic demand, boosting confidence, and optimizing real estate policies. These deployments enhanced market confidence and supported the upward trend of aluminum prices.
  • The Federal Reserve raised interest rates as scheduled, which raised economic expectations and restored international market confidence. This also boosted aluminum prices.


PVC (SG-3) – cost increased 5.38%

The weekly average price increase narrowed from the previous week. The main reasons for this are:

  • The fundamentals of PVC powder have improved, as export orders continue to increase. This has increased demand for PVC powder, which has supported prices.
  • The 724 meeting was held, which enhanced macro expectations. This has also supported prices.


Paper for cartons (AA 120G) – cost decreased 3.61%

Producers at the raw material end of the corrugated and box board paper industry have influenced the overall costs to head downwards. In the short-term, waste yellow board paper is expected to decline and local prices of corrugated and box board paper still have downward pressure as well.


Stainless steel (304/2B 0.04mm) – cost decreased 0.39%

Overall, the recent market has seen increased supply digestion, which has increased supply support. The future market demand is expected to remain optimistic, and market support still exists. However, considering the pressure of month-end sales, it may limit short-term market support. It is expected that the stainless steel market will be weak after a strong period next week.


Battery (Lithium cobalt oxides) – cost increased 0.50%

The price center of upstream cobalt and lithium is weakening and moving downward, which provides limited support to positive material products from the cost side. Downstream consumption is in the off-season, and lithium battery manufacturers’ replenishment is poor, dragging down some cathode material manufacturers’ offers. As a result, market prices are both stable and weak.


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.

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