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.
Darling: Steel from China Rivals Taiwan Prices
At the conference Witucki was joined by Bruce Darling of Porteous Fastener Company, who complimented those in attendance.
“Being in this room means you’re a survivor; maybe the walking wounded, but you survived,” Darling quipped.
Darling noted Asian steel prices are declining as inventory begins to grow.
“The gap between the steel prices of China and Taiwan is growing smaller,” mostly due to the common sources for iron ore and other raw materials.
Historically, steel from China was about 22% cheaper than Taiwan steel.
Predicting price fluctuations is being increasingly difficult, Darling stated, noting that “some greed has come into steel prices in the past few years.”
“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.”
Darling said customers who watch steel prices are asking for the ‘cheap stuff’ when it comes to fasteners, but inventory made from lower-cost steel is “90 days away,” he reminded attendees.
Darling commented on the federal “10+2” rule, which goes into effect January 1. However, regulations for the rule have yet to be published, he said.
The U.S. Customs & Border Protection regulation requires specific cargo information for shipments bound for the U.S. The “10+2” rule would require importers to make an “Importer Security Filing” with cargo information before entering U.S. ports.
Information must be filed at least 24 hours in advance of containers being loaded on vessels in foreign ports. The data elements are: Names and addresses for Manufacturers, sellers, buyers, ship-to and consolidators; stuffing location in container; importer of record; products’ country of origin; and commodity tariff code number.
The carrier must also provide CBP the location of containers and container status messages daily on certain specified changes in container status.
Darling disagrees with the government’s estimate that the new rules will add seven days to the shipping process.
“We’re talking two weeks of delays.” �2008 FastenerNews.com