The European fastener industry is doing quite well thanks to a strong economy, the executive editor of Europe’s fastener magazine told Fastener Fair USA. The biggest problem may be “significant pressure on capacity – whether productive people or supply chain.”

Phil Matten points to several years of solid growth in manufacturing in the eurozone.

European fastener company ownership “is still strongly family – particularly in Germany and Italy – providing stability through long term commitment.”

There are ownership changes, such as Nedschroef now being Chinese owned and Taiwan’s Boltun and Sumeeko having bought into European fastener manufacturing.

Matten, executive editor of Fastener+Fixing Magazine for two decades, followed marketing for fastener companies earlier in his career, and has visited hundreds of companies across the world.

• About 20% of European fastener production is for aerospace, followed by automotive. Oil and gas fastener specialists “have had a torrid time but are hanging in there,” Matten reported.

• The construction fastener market “is tough,” Matten said. “The strongest manufacturer is Cooper & Turner, which has now set up manufacturing in the U.S.”

• Sixty percent of UK fastener manufacturers turn over less than EUR 8.1 million (US$10m) annually.

They are primarily hot forgers and NC machinists focusing on short runs, short lead times and niche demand.

“They’re agile, quality oriented and highly responsive – necessities to prosper in today’s market.”

• Automotive is a major fastener demand driver in Europe.

“You can see why Germany is the dominant fastener producing nation in Europe – and why export has long been really important to Italy,” Matten observed.

• Distribution’s strength is local supply and where “OEMs require intensive logistical support.”

• There is a high level of distribution family ownership, providing “a key stability” in Europe, Matten noted. He cited Keller & Kalmbach, Berrang, Bossard, Dresselhaus, Reyher, Schafer & Peters, Bollhof and Würth Group.

“Yes, there is significant consolidation – particularly in the UK recently – and there will be more,” Matten said. “However, most of the big family companies have clear succession provision.”

Examples of corporate ownership are Optimas Solutions, TR Fastenings and Supply Technologies.


Results of 2009 European Tariffs
The results of the 2009 antidumping duties of 85% on carbon steel fasteners from China were mixed. There is “no question that China had achieved a massive share of the imported sector and it was hurting European manufacturers.”

The duties may have stopped direct imports, but “triggered all kinds of circumvention through other countries – particularly Malaysia,” Matten said.

“European producers certainly did benefit in 2009 / 2010, but a lot of that was because distributors had radically cut inventory and were living hand-to-mouth,” Matten observed. “Longer term, distributors swung back to Asia – particularly to Taiwan.”

“The duties gave volition to fastener manufacturing in many other countries – notably Vietnam long range, and Turkey short range,” Matten finds.

Did the tariffs work?  

“There is little evidence that EU fastener makers switched back to production of standard fasteners,” Matten observed. “Most investment has been targeted at higher added-value special parts.”

“The reality is most of the business switched to other Asian sources,” Matten commented.

And China of 2018 “is not the China of 2007,” he added. China’s fastener production costs are higher. Beijing’s “tightening grip on air and water pollution” ismaking wire rod prices volatile and closing plating facilities – at least temporarily.”

“Taiwan and China are both committed to the higher added-value path.”


Looming Problems
European wire rod prices surged in early 2018, along with utilities.

“There are real concerns about how the barriers are going up around the world – more so now, as a global trade war appears to loom,” Matten observed.

• Low cost imports from China “have long been a concern – especially in Italy,” Matten noted.

• “There is a sustained challenge for attracting young talent” into fastener manufacturing to succeed the aging skilled work force, Matten said.

• “How far can the distributor pass on price increases before the customer goes out of the market?”


Automotive Market
The European car demand has grown for four consecutive years, Matten noted. Commercial vehicle demand rose 3.3% in 2017.

The several years of strong automotive market has resulted in “strong investment in the technologies and systems vital to sustaining future profit growth.”

Europe produced 16.9 million cars in 2017 – adding Turkey and Russia increases it to 19.6 million.

“It’s worth noting how significant car production now is in Turkey and how that is transforming the fastener manufacturing sector there,” Matten noted.

A decline in diesel car sales and acceleration of Alternative Fuel Vehicle demand affects automotive suppliers.  

“For all European markets, now, diesel has become the headache,” Matten finds. The diesel share of new car sales plunged to 31% in Germany during March “as cities readied to ban at least older diesel cars,” Matten commented.

Car makers must achieve fleetwide CO2 targets via improved technology and incentives.

Thus far, alternative fuel vehicle market share has grown to 5.8%.

EVs need two to three times more fasteners – though most fasteners are small, lower grade and lower complexity, Matten noted.

That is not good for European fastener manufacturers “that need high valued added product.”

Matten noted that China, “with its massive air pollution problem, has the greatest incentive to get Alternative Fuel Vehicles right.”


UK Market
Even Great Britain’s ‘Brexit’ has not dampened manufacturing, Matten finds.  

“We’ve shaken off the immediate plunge of concern after the 2016 referendum and benefited substantially from the short term fall in sterling,” Matten explained.

“Manufacturers have won export business, although ironically most of it is coming from the EU market, we’re apparently trying to get away from.”

The UK construction market has been “rattled by the uncertainties that still surround Brexit.”  

“Civil engineering new business is weak – major projects are being held back,” Matten told the inaugural U.S. Fastener Fair.

Matten said a fastener distributor told him “there’s next to no demand for holding down bolts or for anything above M24 diameter. The small stuff is flowing reasonably, but we can feel the freeze on big projects.”

Matten finds the best UK construction sector is housing.

Consumer confidence fell, “but the UK has an underlying housing shortage that continues to drive demand.” Web: FastenerandFixing.com