Imports of iron/steel fasteners under the 7318 CN4 tariff code from Asia over the last decade

The import share of fasteners was dominated by China prior to the implementation of EU antidumping tariffs, Fastener + Fixing Magazine reports.

“In 2009 and 2010, the effect of the tariffs can be seen, but overall import volumes were suppressed by the financial crisis,” writes F+F executive editor Phil Matten. “Inventories were slashed and there was a strong swing towards short range, shorter lead time sourcing.”

As markets recovered and importers returned to long range, longer lead time sourcing, purchasing refocused on Taiwan from which imports continued to grow – even after the antidumping duties on China were repealed.

“Other countries also became increasingly significant,” Matten writes. “Some of these import volumes represented transshipment of Chinese fasteners via third countries – progressively blocked by EU investigators. However, the growth of genuine manufacturing capacity in other countries also becomes increasingly significant.”

Vietnam’s growth – nearly five-fold in ten years – reflects the continued pursuit of lower manufacturing costs. Turkey’s 300% growth, by contrast, reflects its expanding manufacturing capacity for higher grade fasteners, combined with short delivery times to major European markets.

Total import volume was around 7% higher in 2017 than in 2007. Importantly, other countries, in addition to China and Taiwan, now play a significant role supplying fasteners to Europe.

“Imports from China grew rapidly in the months immediately following the repeal of the anti-dumping duties, mainly driven by washers and small screws, which showed the greatest cost differential, as opposed to high-tensile fasteners,” according to Matten. “Then, almost as dramatically, they declined.”

During 2017, import volumes from China stood at 55% of those experienced in 2007.

“So why has China, with the EU doors reopened, not reclaimed the dominant share it enjoyed in 2007?”

Other countries have entered the fray, according to Matten, some with lower costs of production. Additionally, established fastener supply bases have increased productivity and quality – influential on higher added value fastener grades. Also, European supply chain reliability requirements have intensified, and uncertainty over the potential for new antidumping duties has tempered re-engagement with China.

“Perhaps most significantly, the China of 2017 is patently not the same as 2007,” according to Matten.

Average manufacturing wages more than doubled between 2008 and 2016. Other costs of production have also risen substantially. Stringent measures to reduce air and water pollution have impacted steel, coatings and fastener industries, “on occasions coming close to completely interrupting fastener supply in some areas.” The steel cost trend has been upward for the last two years, although “extreme volatility” has reduced quotation validity to a matter of days.

“Does that make China the market economy it now claims to be? In respect of steel the European Commission is emphatic that significant distortions continue to influence export costs.”

What does it all mean for the prospect of renewed trade defense measures on China?

“The issue has clearly has not gone away, although the crystal ball remains densely opaque,” Matten writes.