Darling: Steel Relatively Stable for Next 6 Months

John Wolz

“There appears to be adequate steel available to meet current demand,” Bruce Darling of Porteous Fastener Co. told the Western Association of Fastener Distributors.\
Steel prices may move up slightly during the next six months “but the longer trend seems to be down a little,” Darling projected.
He noted that there is a four or more month lead time and “it takes a while before a steel price change reaches the finished goods average cost.”
“Remember, as you read about steel pricing, that CHQ wire rod is low on the steel “food chain,”” Darling pointed out. “Pricing of steel flats and beams move more quickly than wire rod and is more widely published.”
Since June Metalloyd reported steel plants have reduced the number of employees and increased use of overtime to meet seasonal needs, Darling explained.
Steel production worldwide is growing at a 10% rate. China is up 37.5%, India 12%, Africa 10.6%, South America 2.7% and Russia 1.8%, Conversely the European Union is down 4.8%, U.S. 2.8% and Australia/New Zealand 1.7%.
” In June the China Ministry of Finance reduced the VAT rebate on finished products including bolts and nuts from 13% to 11% to reduce steel exports from China.
” In July Taiwan stainless makers Yusco and Tang Eng reduced production to “help stabilize the market” and several China factories followed.
The U.S. Senate is pressuring China to revalue its currency or face a 27.5% on all China imported. The U.S. Treasury has called for a 10% revaluation and China responded with 2%.
” In August Tokyo Steel Manufacturing raised domestic steel prices by about 10%. “While this steel is primarily H-beams, it is believed it will have a positive effect on the overall steel market in holding up prices,” Darling observed.
East Asia scrap steel prices rose 14% in August.
China Steel of Taiwan announced grade 5 medium carbon and alloy steel will remain unchanged for the fourth quarter, but 10B33 boron and low carbon cold headed quality steel will be reduced 5.6%.
New Fastener Sources
North American importers “have been receiving a larger volume of quote requests from fastener companies in India,” Darling reported. “Our past business relationships with Indian firms have not been lasting.”
However, Porteous has been importing full container quantities of threaded rod from one company for two years. Orders have been “shipped complete and on-time. Product quality meets specification and they have the capability to meet A-36 steel requirements.”
The Engineering Export Promotion Council reports 214 registered firms exporting bolts and nuts and nine factories registered for railway track fasteners.
Among India fastener manufacturers are: Kaputhala Precision Screw, bolts and nuts milled from bar; Lakshmi Precision Screw, dowel pins and shoulder bolts; Mangals Metal, threaded rod; Precision Fasteners, high tensile bolts; Perfect Fasteners, hot formed bolts; Puja Fasteners, high tensile bolts; Shree Krishna Ltd., hot formed bolts; and Sundaram Fasteners Ltd., high tensile bolts.
Malaysian factories include: Chin Well, the publicly-owned Tsai family factory producing mostly metric Cge, lag, nuts and tapping screws; Sup Cheng, run by two brothers of the Taiwanese Cheng family that owns Super Cheng, metric nuts; Tong Heer, part of the Taiwanese Tong Hwei group, stainless fasteners.
Thailand: “Ocean freight costs have been a disadvantage as compared with Taiwan,” Darling noted. Bangkok Fasteners has produced grade 2 and 5 cap screws, hex bolts, Cge, lag and nuts for years; Hamanaka, 2H nuts in limited export quantities; Sumi Machinery Std., washers; Thailock, flange nuts, nylon insert locknuts and two-way locknuts; and Tycoons, originally a drywall producer, has expanded into grade 5 cap screws. Tycoons produces from billets purchased from a variety of sources rather than smelting of iron ore.
Vietnam: “Several companies are investing near Ho Chi Minh City,” Darling pointed out. Lih Lin is a stainless steel small screw manufacturer which opened its factory to export to Europe; Chin Well, which is related to the Tsai family group, and the Jinn Her, Chen Well and Gem Year companies, opened a new factory producing 10,000 million tons per month; Threaded Industrial, the Taiwan nut manufacturer has built a Vietnam factory to produce nuts, small screws and bolts; and Anchor Fasteners is adding a factory in Vietnam to its Taiwan and China facilities.
“We hear Lu Chu Shin Yee, Tong Hwei and Tycoons may be looking to invest in Vietnam,” Darling reported. “It is a country to keep an eye on because of the Taiwanese investment and their knowledge of the U.S. and European markets. Vietnam has a large labor force of inexpensive workers.” �2005 FastenerNews.com