As you may already be aware of, Sofeast’s 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 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!
Being regularly informed allows 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 September 2022 and the price evolution since Jan ’21. Note the monthly cost change, in particular:
Let’s go through the materials and see their monthly cost changes and the notable reasons for them:
- Epoxy resin (epoxy refers to E-51) – increased 10.48%
The continuous rise in the price of bisphenol A, the raw material, is the main reason for the rise in the price of epoxy resin.
After the Mid-Autumn Festival holiday in China this month cost pressure has increased, manufacturers raised prices, and it’s more difficult to find low-priced epoxy resin on the market.
- ABS plastic – increased 4.71%
Upstream crude oil prices rose due to the volatility of the dollar exchange rate, and the market prices stabilized and rose as operator mood improved.
- Silicone (110) – decreased 3.94%
The price of DMC the raw material for silicone has decreased, the demand for mixed rubbers downstream in the market continue to be weak, and the sales of 110 have been weak so prices have fallen.
- Zinc alloy (Zamak5) – increased 0.20%
Since the beginning of August, the price of sulfuric acid, a by-product of smelters, has fallen, together with the low processing fee of zinc concentrate, the profit of smelters has contracted or even lost, and the situation of routine maintenance and unsold of smelters is obvious
- AL alloy ADC 12 – increased 1.61%
Capacity has increased as aluminum plants in Sichuan and Yunnan provinces have gradually resumed production following disruption by extreme weather. From the point of view of supply and demand normal production according to orders still remains at a low level.
- PVC – decreased 2.00%
The main reasons for the decline are that demand is limited, inventory remains high, and the peak season’s demand is falling. On the other hand, US inflationary pressure is higher than expected.
- Paper for Cartons (AA high tile 120G) – decreased 5.59%
Most paper mills have maintained relatively stable prices, but upstream raw material waste paper prices continue to decline and so cost support is weakened.
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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