Here’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 December 2023 and the price evolution over the past twelve months:
Here you can see the individual cost evolution per material over the past year, including the weekly and monthly change for December 2023:
Here is what our market analysts attribute these changes to during this past month:
Epoxy Resin (E-51) – decreased 2.48%
On the supply side: Though some manufacturers hold higher inventories, their willingness to ship remains steady, ensuring sufficient market spot availability. However, potential disruptions in logistics due to holiday season congestion deserve attention.
Demand-wise: Most downstream industries are in their traditional off-season, leading to weakened overall demand. However, some pre-New Year’s Day inventory replenishment might occur. Closely monitor actual purchase volumes to gauge demand accurately.
Raw materials: According to Zhuo Chuang information, bisphenol A prices are expected to remain range-bound next week, facing upward and downward pressures. Epichlorohydrin prices are likely to continue their downward trend. Overall, raw material costs are anticipated to experience minimal fluctuations, offering limited support to spot performance.
ABS AG-15E1 – decreased 1.80%
The domestic ABS market saw a modest increase this week. Mainstream domestic material prices ranged from 9,400 to 10,350 yuan per ton, with lower-end prices rising by 100 yuan per ton and higher-end prices increasing by 50 yuan per ton compared to last Thursday. Buoyed by the uptrend in crude oil and styrene markets, the sentiment in the ABS market improved through a domino effect. However, spot transaction volume remained limited.
Silicone (110) – increased 0.68%
Domestic 110 Raw Rubber: This week, the market maintained stability, albeit with contrasting situations among different players. Leading enterprises offered lower prices, gaining an edge in order acquisition, but with extended delivery cycles. This pushed most customers towards them.
Many other manufacturers, struggling with significant profit losses, scaled back production. Local, low-production manufacturers capitalized on their spot supply advantage, focusing offers and transactions around 15,000 yuan per ton, typically in smaller orders.
Zinc alloy (Zamak5) – increased 0.20%
Despite a slight uptick in spot zinc prices, trader activity remained muted, reflecting a chilly market atmosphere. Downstream businesses adopted a cautious approach, opting for minimal purchases to fulfill immediate needs. This limited overall demand, further exacerbated by weakened construction activity in the north. Consequently, trading performance was lackluster.
AL alloy ADC 12 – increased 3.41%
Across the domestic spot market, shipments from cargo holders are dwindling. As traders hesitate to take on inventory, downstream manufacturers are only purchasing for immediate needs. This cautious approach, coupled with low social inventory, maintains a subdued trading atmosphere.
PVC (SG-3) – decreased 2.19%
Guangzhou’s PVC market saw prices dip slightly today, mirroring the weak performance of the futures market. Traders initiated the day with marginally lower offers than yesterday, but buyers remained hesitant, further dampening trading activity. The subsequent decline in futures prices prompted some additional downward adjustments in quotes. Consequently, point price supply has temporarily lost its price advantage.
Paper for color box (157g) – 0.00% change
Paper for carton (AA120G) – increased 3.55%
Three key factors shaped the corrugated paper market this week:
- Price Adjustments: Leading paper mills in Quanzhou and Taicang raised factory prices by 30-50 yuan/ton, while smaller mills maintained stable shipments. This resulted in limited market fluctuations.
- Rising Raw Material Costs: The price of waste yellow board paper, a crucial raw material, continued to climb. This upward trend, driven by the upstream and downstream product chain, provided some cost support.
- Subdued Demand: Terminal orders fell short of expectations, prompting downstream packaging factories to adopt a cautious approach, purchasing only as per order requirements. This widening gap between supply and demand further impacted the market.
Stainless steel (304/2B 0.4MM) – decreased 4.36%
Stainless steel roared this week, fueled by both futures and spot market momentum. Futures prices continued their ascent, providing a strong foundation for the sector. This bullish sentiment translated into a revitalized spot market atmosphere, with traders cautiously pushing prices higher. Adding to the heat, expanding snowfall in some regions disrupted deliveries, further driving up market optimism. Production enterprises, capitalizing on the positive sentiment, gradually increased their guiding prices, further fanning the flames of market enthusiasm. This synchronized upward movement in both futures and spot markets culminated in a significantly warmer trading atmosphere.
Battery (lithium cobalt oxides) – decreased 20.99%
The cathode material market shifted downwards this week, driven by a confluence of factors. Upstream raw materials, including lithium salt and cobalt salt, saw slight declines, offering weaker cost support. Additionally, downstream lithium battery production and marketing faced challenges, leading to reduced demand for positive electrode materials. As a result, overall transaction volume remained low, with only scattered single deals occurring in a subdued market atmosphere.
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.
Sofeast commissioned some research recently on which chemical compliance incidents occurred in EU countries in the past year 22/23, the substances found, where, and the actions taken by authorities.
