Chinese Building Materials, Furniture Suppliers Raise Prices Again as Mideast War Pushes Up Costs

(Yicai) April 23 -- Major suppliers of building materials and furniture products in China have been forced to hike product prices several times within a month despite the Chinese real estate market remaining sluggish, but amid rising costs stemming from growing prices of crude oil and other commodities due to the Middle East war.Oriental Yuhong notified its clients and business partners last week that it will hike the prices of all waterproofing materials by 3 percent to 8 percent starting April 30, after raising the same by 8 to 12 percent at the end of last month. In addition, it raised the prices of asphalt-based waterproofing materials by 5 to 10 percent in mid-March.The latest price increase was due to the significant growth in raw material costs caused by the continuous rise in international crude oil prices, Beijing-based Oriental Yuhong noted. For example, the price of asphalt has surged 53 percent from a year earlier, of acrylic emulsion 47 percent, and of epoxy resin 30 percent, it pointed out.Asphalt is one of the main raw materials for Oriental Yuhong's waterproofing products, with the market for this by-product of crude oil processing being greatly influenced by fluctuations in international oil prices. The average price of asphalt in China topped CNY4,528 (USD663.63) per ton early this month, up 31 percent from early March and 23 percent from a year ago, according to data from ibuychem.com3Trees Group also notified its customers last week that it will raise the prices of interior and exterior wall coatings, art paints, and some other products by 3 to 25 percent from May 1. Last month, it increased the prices of interior and exterior wall latex paints by 5 to 15 percent and of art paints by 5 to 10 percent.3Trees will probably have to raise prices again because of the large uncertainty in the prices of raw materials, the Fujian province-based company stressed.In addition, cement suppliers in Northeast, East, and Southwest China have increased prices by about CNY10 to CNY100 (USD1.46 to USD14.63) per ton since the middle of last month.Pressure on Furniture Supplier"Due to the volatile international situation, the overall cost pressure on the industry has significantly increased," the Shunde Furniture Association of Guangdong Province said recently. "The prices of finished furniture will likely rise accordingly."The city of Shunde boasts the world's largest furniture market, with the local Lecong Furniture Mall having over 3,400 dealers displaying more than 20,000 types of furniture."Sponge, wood, hardware, and other raw materials used for furniture have been rising in prices, generating great pressure on our sales pricing," a furniture industry practitioner in Shunde told Yicai.If the recovery of the real estate market falls short of expectations, the room to raise the price of furniture will be limited, an industry insider from Shunde said to Yicai, adding that some suppliers may face dual pressure from "difficulty in increasing prices and thin profits".Editor: Martin Kadiev