PERSPECTIVE: More China Fastener Makers Face Bankruptcy

Jason Sandefur

Editor’s Note: The following column is presented by Taiwan-based Fastener World magazine as part of a news column exchange with FIN.
Despite the negative impact of macroeconomic adjustment and a tightened monetary policy, China’s mechanical industry increased 30% in 2007, while the automobile industry increased 25%, engineering machinery increased 20%, construction MRO increased 25%, and the electronic & electrical industry increased 20%, Fastener World reports.
In 2007 Chinese fastener output rose 14% to 5.25 million tons, while revenue from fasteners grew 14.2% to RMB 44 billion. Fastener exports jumped 24% to 2.57 million tons, with the value soaring nearly 38% to US$3.25 billion. The average unit price increased 11% to US$1,264.98 per ton.
But 2008 has been a different story for China’s fastener industry.
The global credit crisis caused raw material prices to “substantially increase,” while energy and labor costs rose and the threat of anti-dumping duties from the European Union put pressure on the industry.
In 2008 the Chinese fastener industry saw exports drop 15% to 20%, pushing a “great number of small- and medium-sized business to face production stoppages and bankruptcy.”
These conditions accelerated re-capitalization, new business strategies and a “structural readjustment of products in order to assist the industry in stabilizing development.” �2008 FastenerNews.com