Jason Sandefur

Steel is feeling the crunch of the global financial crisis, Nucor Fasteners general sales manager Jim Witucki told attendees of a Western Association of Fastener Distributors seminar at the National Industrial Fastener Show/West in Las Vegas.

“It’s having a very real impact in the steel industry,” Witucki stated.

The global steel industry is tight, though it could see capacity weaken for the next five years through 2012, Witucki noted at the “U.S./Asian Fastener Market Trends” conference sponsored by WAFD. Witucki said that steel demand in North America is expected to be “anemic,” though demand in Mexico is expected to grow faster than the U.S. Some analysts project that U.S. capacity could drop 25% within a year, he noted.

The downturn comes at a time when global steel demand, for only the third time since 1900, appears to be in an extended period of substantial growth, he commented. “We’re not exactly Exxon Mobile, but steel has done pretty well since 2004.”

But don’t expect Nucor’s fastener prices to suddenly decline. Witucki said steel accounts for roughly 50% of the cost of the fasteners Nucor manufactures. The other half consists of wire processing, pickling, annealing, heat treatment, and final inspection all costs that remain high.

At the conference Witucki was joined by Bruce Darling of Porteous Fastener Company, who said Asian steel prices are declining as inventory begins to grow.

“It is a difficult time to determine what to expect next,” Darling stated. “We see steel mills continuing to raise prices at a time when consumption remains slow. Fastener prices are beginning to come down because of steel surpluses and factors other than steel.”

For more on fastener prices, see the upcoming issue of FIN. �2008 FastenerNews.com