As the Strait of Hormuz reopened and closed again this week, manufacturers across China are navigating a roller coaster of concerns rooted in supply and pricing volatilities.<\/p>\n
Soaring oil prices have already filtered through to processed fuel and petroleum-based raw materials that help power China\u2019s manufacturing sector \u2013 the world\u2019s largest \u2013 and a fragile two-week ceasefire between Iran and the United States is unlikely to restore pre-conflict stability in the near term, according to industry insiders.<\/p>\n
\u201cSome companies have begun delaying or cancelling orders,\u201d said Wang Chao, a senior analyst at advisory firm Guangzhou Quantitative Consulting, adding that firms were attempting to avoid passing higher costs to consumers.<\/p>\n
\u201cThis is not limited to factories. Cross-border e-commerce shipments have also been affected. In the home-appliance sector, higher freight costs have hit end-market demand, prompting overseas buyers to scale back or postpone purchases,\u201d Wang added.<\/p>\n
Brent crude oil trading around US$100 to US$105 a barrel remains \u201celevated enough to squeeze costs across supply chains\u201d, Wang said. Crude was around US$70 per barrel before Israel and the US launched strikes on Iran more than a month ago. Prices were roughly US$96 a barrel as of Friday.<\/p>\n