Suppliers Comment on Steel Situation

John Wolz

Chaikelson: Demand Reduces Inventory
�Our fastener inventory is considerably lower than normal due to very strong market demand,� Mortie Chaikelson of Infasco said. �Raw material inventory for Infasco is tight but sufficient. Most of our steel wire rod is purchased from Ivaco�s steelmaking product group,� he noted.
�Customers are accepting fastener price increases as a fact of life,� Chaikelson finds. �Of course, customers are seeing sizeable price increases in many other products as well.�
Chaikelson�s �crystal ball� calls for �moderate� additional price increases in the short term followed by �price stability for a while at the �current� price levels.�
Chaikelson�s recommendation to distributors: �Because of continuing global steel shortages, fastener supply will probably continue to be tight � so distributors should adjust inventories accordingly.�
Witucki: More Than Steel Costs Are Up
�Steel is high,� Nucor�s Jim Witucki. �We don�t know for how long.�
Other costs � such as pallets, natural gas, labor and tooling � are up too, Witucki added. �There is a tendency to blame it on steel. Our natural gas bill is up $500,000. It is more than steel.�
�We�re not recommending holding off buying because of potential shortages,� Witucki advised. Distributors could be �playing with fire if you think holding off 30 to 60 days� will yield lower prices.
Nucor removed its stock list from its website. �We are carefully reviewing new customers and watching credit more closely. This is a time when long-standing good customers have an advantage,� Witucki added. �We feel a responsibility to our core accounts.�
Nucor has ramped up fastener production to meet demand where there is shortfall.
Li: Looming Steel Supply Problem in Taiwan?
�Our steel supply is stable,� Andy Li of Jinn Her in Taiwan reported. �However, we think we will face the shortage problem late this year.�
Li predicted fastener prices �will go up again since the raw material price keeps on increasing. In addition, the delivery schedule will not as stable as before since material shortage problem. Shortage problems will become more and more serious late this year.�
Jinn Her produces order by order and thus does not carry an inventory, Li noted. Jinn Her�s main products include Hex Cap screws, Hex bolts, structural and T.C bolts, Hex flange screws, wheel bolts, sems, 12-point flange screw and specials.\ �2004 FastenerNews.com