John Wolz

After a 20% third quarter hike, steel prices in Taiwan are up another 4% for the final quarter of 2008, Bruce Darling told the Western Association of Fastener Distributors. Prices in China actually dropped 7.5% this quarter after a 22.7% increase in the third quarter.
The cost of steel represents 62% to 65% of the cost of a fastener.
Current inventory on distributors’ shelves in North America is probably based on 2007 steel prices of $564 per ton in Taiwan and $460 to $640 in China, noted the vice president of materials for Porteous Fastener Company.
This quarter’s steel price in Taiwan jumped to more than $1,014 per ton, compared to $844 in China.
At a time when steel fastener prices are rising, brass, nickel and moly are down, indicating stainless steel and brass fastener prices may be steadier.
In addition to the cost of steel, the “usual suspects of energy and transportation” are increasing imported fastener prices, Darling pointed out. A steel furnace being offline for 45 days in Taiwan adds to price pressure, as does the weak U.S. dollar.
Taiwan steel prices are up 80% since the second quarter of 2007 and China is up 83%. That represents a 49% increase in the cost of fasteners from China.
Asian mills had to pay 65% more for iron ore from Brazil this year and Australia’s iron ore practically doubled at 96%.
“It is a difficult time to determine what to expect next,” Darling said. “We see steel mills continuing to raise prices at a time consumption remains slow. Fastener prices are beginning to come down because of steel surpluses and factors other than steel,” Darling observed.
He noted the cost of fuel is coming down, electricity increases have been postponed in Taiwan, while steamship companies report vessels are not full and spot rates are decreasing.
Despite the increases, Darling advised distributors to buy mill product, but “not buy big extra quantities. You’ve got to buy to have stock to serve your customers.”

Editor’s Note: Darling will speak at NIFS/West in Las Vegas in November. �2008 FastenerNews.com