By Phil Matten
Fastener+Fixing Magazine

Wire rod prices are increasing worldwide panelists told the European Fastener Distributors Association. European wire rod costs had risen by around EUR 100/ton in the first quarter 2018, following a similar level of increase in 2017. 

In China, government policies restricting winter steel production, combined with the long-term elimination of some low-grade output, had irrevocably changed the steel production market. Prices increased sharply in 2017 Q4 and were now stabilizing at higher levels.

The long-term cooperation between Taiwan’s China Steel Corporation and its domestic fastener industry, meant greater stability in material costs, making it “perhaps very lucky” said Joe Chen, who estimated 2018 H1 increases equated to around US$40/ton.

Korean fastener producers had experienced significant wire cost increases in October 2017 and again in April 2018, panelist Hansung Jung reported. Increases from Japanese steel mills had been sharper, due to shortages of supply in the domestic market.

For the U.S., Adam Pratt, the manufacturer member on the National Fastener Distributors Association board, said, “It’s painful!”

Wire rod costs increased as soon as President Trump announced plans for tariffs, with further inflation as they were brought in, Pratt noted. Fastener manufacturers needing to source special steels from Canada, face a tariff-driven 25% price increase, Pratt pointed out.

The consensus among the panelists representing fastener associations from Europe, China, Korea, Taiwan and the U.S., was carbon steel costs were less likely to increase significantly in the second half 2018.

However, stainless steel was different, EFDA president Dr. Volker Lederer explained. Sustained increases in nickel costs had been driven by a major fall in nickel inventories. A continued market deficit was expected through 2018, and in the context of strong global stainless steel demand, costs for fastener producers could be expected to continue to rise.

Panelist Xue Kangsheng confirmed growth in Chinese fastener exports for the first half of 2018 and saw stable development in the Chinese manufacturing industry. He explained structural transformations being driven in the Chinese fastener industry, including greater emphasis on innovation-led, intelligent and environmentally responsible, manufacturing.

Ivan Lee said the Taiwanese fastener industry expects 2018 to be stable, with perhaps marginal growth. Longer term it was concerned that increased global protectionism could put pressure on its fastener industry.

Adam Pratt referred to historic experiences, from which the current U.S. president recognized the risk of material-targeted tariffs generating rapid growth in imported finished goods. Pratt concurred that “everyone has been incredibly busy so far in 2018.”

However, he noted that the NFDA’s analysis of economic trend data indicated a slowing growth curve for 2018, lending credibility to forecasts the US could experience mild recessionary conditions later.

• The EIFI’s Anders Karlsson said “there is no short-term alternative in meeting CO2 targets to the modern diesel engine.”

“The diesel has taken a lot of hits it does not deserve,” Karlsson said. “The automotive industry has itself to blame.”

Looking forward Karlsson said, “everybody believes in the electric vehicle. It is coming, but it is not coming that quick.”

Big changes were unlikely in the next five years, he added.

Jung expressed concern that EVs would impact fastener manufacturers, but saw the longer-term development of autonomous vehicles and changes in car usage, as threatening a more significant decline in automotive fastener demand.

Xue concurred that movement away from traditional diesels would impact demand for high-end fasteners. Fasteners required in new energy vehicles, while numerous, were less technical and could be produced by many more fastener plants. Sue saw opportunities for the adhesives industry but longer term less favorable conditions for traditional fastener enterprises.

Published research suggests change will be driven by initiatives to improve air quality in cities and from expectations of younger people. By 2030, it was suggested, 35% of vehicle production will be electric or hybrid powered, but with a 4:1 ratio in favor of the latter.

• “Fasteners are not a very sexy business,” opened Volker Lederer. “Both in manufacturing and distribution it is difficult to attract good potential employees, especially as economies are currently booming.”

FDS, the German fastener distributors association, had recently set up a “Junior Group” for younger business people to discuss these issues and try to find modern ways to enhance the attraction of the fastener sector.

• Xue advocated that the growth of technology in manufacturing, marketing and logistics compelled recognition of the importance of human resources. Sue agreed that the fastener industry may not be the first choice for the youth generation, but he outlined measures the CFIA, working with educational institutions, to change these perceptions.

It was also crucial to incentivize skilled workers and talented management professionals to stay in the fastener industry, Xue said.

Jung agreed technology and automation are driving the need for highly skilled recruits and outlined some of the measures the Korean fastener industry was taking in preparation for the Industry 4.0 revolution.

Joe Chen noted that in a strongly family-owned Taiwan industry, younger family members may work in other fastener companies to broaden their skills base, for the benefit of their own family company and the industry as a whole.

Adam Pratt believed that “as associations in the industry we have got a really good opportunity to positively affect this issue in each of our own home regions.”

Pratt described how regional and national associations in the U.S. supported the Fastener Training Institute to provide an intensive, one-week fastener course.

Pratt said he takes issue with the fastener industry not being “sexy, although we say it in the U.S. too. We are working with Tesla, with Apple, with Daimler – really cool companies doing great things, and we are part of that.” 

To general applause he concluded: “We need to change our message and recognize we do some pretty cool stuff too.”

Karlsson noted “it takes a year to train a header operator and as an industry we must work harder to keep them and continue to develop them.”

Bulten Polska was recognized by the Polish president as the most employee friendly company in Poland, Karlsson pointed out. Even the cleaners are fully contracted employees, he noted.

“That’s the way you keep your people. Invest trust in them and they will give trust back.” Web: efda-fastenerdistributors.org Web: fastenerandfixing.com

 

Europe’s Lederer: Distributors No Longer ’Box Shifters’
The European Fastener Distributors Association “represents an industry that is no longer a simple box shifter,” Dr. Volker Lederer observed.

“We are now a strategic contributor that literally holds European industry together; investing in equipment, connectivity and people to effectively manage complex global supply chains,” the EFDA president said at the group’s meeting in the Netherlands.

There are “more than 2,000 major fastener distribution companies across Europe, employing more than 44,000 skilled people and holding more than 2 billion euros of inventory, in order to supply more than 130,000 different items, worth more than 10 billion euros every year,” Lederer said.

Lederer said EFDA’s strength and activity was vital in an international geo-political situation that has become more insecure and unstable. “We are living in a period of increasing protectionism, driven by a country that we never expected to jeopardize free trade,” Fastener + Fixing reported.

“We face increasing trade barriers across the Atlantic Ocean and we fear the WTO might lose its weight in ensuring free and fair international trade.”

Within the EU, Brexit also raised concerns: “With the UK leaving the club, the EU is taking a more protectionist way,” Lederer declared.

“Free access to all global procurement markets must be maintained.”

He committed EFDA to “continually and consistently present its arguments to European politicians and administrators.”

Lederer also encouraged the association to “continue to increase our presence at international fairs and conferences and to engage with fastener associations outside Europe,” according to Fastener + Fixing.

Representatives from the China Fastener Industry Association and the Korea Federation of Fastener Industry Cooperatives attended EFDA in Rotterdam along with Taiwan manufacturers and exporters, U.S. distributors – National Fastener Distributors Association – and European manufacturers.

Lederer was re-elected president for another two-year term and Gian-Marco Dalpane from the Italian distributors association, UDIB, was elected VP. Web: fastenerandfixing.com