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 October 2023 and the price evolution over the past twelve months:

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

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

Epoxy resin (epoxy refers to E-51) – cost decreased 4.62%

Raw material negotiations for bisphenol A and epichlorohydrin remained within a narrow range, slightly increasing the cost support for epoxy resin. Liquid epoxy resin producers are mainly fulfilling early orders, with stable and high device utilization. Solid epoxy resin factory shipments are flat, with starting loads mostly at the medium to low level. The finished product inventory of some on-site factories is large, and the market spot supply remains sufficient. In some areas, the supply of low-cost goods has decreased, the market atmosphere is subdued, and transactions are mainly need-based.

 

ABS (AG-15E1) – cost decreased 6.11%

The ABS market is weak, with some prices slightly lower. The cooling of replenishment demand, combined with the insufficient boost of upstream raw materials, has dampened the trading atmosphere. As the end of the month approaches, the amount of regional arrivals is increasing, and merchants are more willing to ship, with some offers slightly flexible. Small and medium-sized downstream factories are lacking confidence, and actual usage and stockpiling are mostly muted. ABS manufacturers are maintaining their inventory levels, and minor repairs of some equipment are unlikely to reverse the trend of weak supply and demand.

 

Silicone (110) – cost increased 3.28%

Domestic raw rubber market prices for grade 110 rose steadily. Due to the stability of leading enterprises’ prices and the obvious upside potential of raw materials, most domestic rubber enterprises have reduced production and operation, and the overall raw rubber utilization rate is not high. However, due to the weak performance of terminal demand and the large supply volume of leading enterprises, the imbalance between market supply and demand is difficult to reverse. Within the week, due to the failure of market decline expectations, some downstream positions were covered by a modest amount of bargain hunting, and the price of raw rubber rose steadily.

 

Zinc alloy (Zamak5) – cost decreased 3.23%

Zinc prices fell, with both futures and spot prices declining. Spot market traders were shipping goods, but transactions were generally weak due to weak downstream demand. Buyers were only taking goods for storage, further limiting transactions.

 

AL alloy (ADC 12) – cost increased 0.23%

International macro market risk aversion has slowed down, easing pressure on aluminum prices. From a fundamental perspective, the aluminum alloy ingot market remained stable during the period, with strong supply and weak demand. Manufacturers are reducing inventories, and prices are fluctuating slightly. It is expected that aluminum alloy ingot prices will remain in a narrow range next week. Attention should be paid to downstream demand and the impact of macro news on the market.

 

PVC (SG-3) – cost decreased 6.20%

Improved PVC powder fundamentals and a better macro environment are supporting upward price movement. Specifically, some supply-side devices have resumed operation this week, leading to a slight increase in upstream enterprise domestic demand orders and export order delivery support, while social inventory continues to decline. On the macro side, news of additional national debt issuance has boosted market sentiment, further improving the macro environment.

 

Paper for color box (157G) – cost increased 6.35%

The main factors affecting the price trend include:

  • A slight weakening of the upstream pulp spot price trend this week, suggests a weakening cost driver.
  • Continued price mentality among paper mills, with industry confidence remaining relatively strong.
  • Poor dealer shipments, cautious purchasing by downstream printing factories, and reduced acceptance of high prices weakened positive demand momentum.

 

Paper for cartons (AA 120G) – cost increased 4.45%

First, while some large paper mills have raised factory prices by 50 yuan/ton, implementation of the increase has been general, with small and medium-sized paper mills more likely to implement real one-on-one negotiations, resulting in a slight decrease in transaction volume. 

Second, downstream packaging factory orders have not improved, short-term market expectations are weak, and purchasing intentions are generally muted. 

Finally, the price of the main raw paper has moved slightly upward, and the cost is still supportive of paper prices, subject to the transmission effect between upstream and downstream products.

 

Stainless steel (304/2B 0.04mm) – cost decreased 1.93%

Low profits continue to limit businesses’ willingness to produce, and news of production cuts has supported the market. However, month-end sales pressure and rising overall inventory pressure have weighed on the market, despite insufficient cost support. Without further news, the stainless steel market is expected to weaken slightly next week.

 

Battery (Lithium cobalt oxides) – cost decreased 4.05%

Lithium salt: Buyers are depositing just enough for market replenishment near the end of the month, but bearish guidance for the lithium carbonate spot market is emerging due to the expected weak downstream demand for lithium carbonate in November.

Cobalt and compounds: The domestic spot market is depressed, with the supply side holding up prices. Short-term cobalt salt prices are expected to remain deadlocked and weak.

Nickel salt: Short-term cost support is temporarily propping up spot market prices, but demand is sluggish. Nickel salt prices are expected to consolidate.

 

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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