Taiwan's Fastener Industry Produced Nt$33 Billion of Various Items in The Q3 of 2011

Bearish outlook due to sluggish American and EU economies and financial woes Despite the European debt crisis, anemic American economic recovery, and disrupted car-making and PC sector after the earthquake in Japan last March, Taiwan’s fastener industry produced NT$33 billion of various items in the third quarter of 2011 for a 3% increase from a quarter ago, with NT$31 billion of which exported to hit an all-time high, according to statistic compiled by the Metal Industries Research & Development Center (MIRDC). The industry finished the first nine months with output of NT$94.3 billion, up 17% compared to a year ago, and exports and imports of NT$87.7 billion and NT$3.3 billion, respectively, up 17% and 15% year-on-year, with export price averaging NT$81 per kilogram and local demand for fasteners growing to NT$9.9 billion for a 16% growth. The MIRDC report shows that the U. S. Imported 34% of Taiwan’s fastener exports as the largest buyer in the first three quarters, trailed by Germany (10%), the Netherlands (6%), Japan (6%) and the U. K. (4%), with Japan paying on average NT$97 per kilogram as the highest compared to others. Taiwan also imported NT$3.3 billion of fasteners, including NT$1.2 billion imported in the third quarter alone, with Japan, the U. S., China, Germany and the Philippines among the top-five suppliers accounting for 53%, 10%, 9%, 6% and 4% shares, respectively, in the last three quarters of the year. Bearish Outlook The industry’s two biggest export markets, the U. S. And EU bloc, both have been dampened by sluggish economies and financial woes, which might shadow the outlook of Taiwan’s fastener industry in the months to come. MIRDC analysts say that global market observers are increasingly pessimistic about the weak U. S. Economy, partly due to interrupted global supply chains in the auto and auto parts sectors following the massive earthquake in northeastern Japan on March 11, 2011, and partly due to governmental moves in response to surging international oil prices that may compromise budding domestic demand. Citing International Monetary Fund’s forecast, the analysts say that the American economic growth was only 1.5% in 2011, and will remain sluggish at 1.8% a year later. While the American housing market remains mostly depressed, manufacturing there however sustained demand for fasteners, say MIRDC analysts, who added that the Taiwan fastener industry hence exported 12% more items in the first three quarters of 2011 than a year ago, but down 9% relative to the same period of 2008 before the global financial tsunami. The European market also sagged due mainly to governmental credit tightening, austerity measures and weak consumer and enterprise confidence amid the mounting public debt crisis. The IMF said the 2011 GDP growth of the euro zone would be 1.6%, and slide to only 1.1% in 2012. However, MIRDC analysts say that Taiwan’s fastener export to the EU remained stable in 2011, with export volume totaling 396, 000 metric tons in the first nine months for a 30% growth compared to a year ago, which was also higher than 394, 000 metric tons going to the U. S. The average price of the industry’s shipments to the U. S. And EU reached NT$74.2 and NT$77.9 per kilogram, respectively, the latter of which still less than NT$84.4 seen at the end of 2008. The analysts also warn the industry to pay more attention to global economic uncertainty in the months to come, which may worsen due to slowing economic growths in the developed nations, exacerbated by persistently high unemployment in the peripheral EU nations and skyrocketing international prices of raw materials as well as predictions that oil may rise to US$150 a barrel. Positive News There were some bright spots seen in the third quarter that has the MIRDC believe the industry in Taiwan to stand a good chance in the global market. Firstly, the analysts say that China Steel Corp., Taiwan’s largest steelmaker supplying many downstream fastener customers, had decided to stabilize the price of wire rods sold domestically at NT$2, 500 per metric ton from June through December 2011, helping to cushion Taiwanese fastener makers from rising prices of raw materials. Also the EU commission announced anti-dumping punishment on Malaysian exporters after months-long investigation had discovered that Chinese makers used proxy exporters to dump fasteners in Europe to shrewdly evade punitive tariffs already imposed on them. So the EU commission decided to impose an 85% duty on fasteners from Malaysia, from where only eight exporters were spared of such punishment. However, the WTO recently determined that the EU’s anti-dumping punishment against China’s fastener export violates international free trade regulations, so has asked the EU commission to lift such restrictions. MIRDC analysts suggest Taiwanese manufacturers stay closely tuned to the matter and take proper actions. After several months of rapid growths during the second quarter, Japan’s fastener imports stabilized in the third quarter. MIRDC analysts say that the second-quarter imports hit a single-quarter high of 88, 000 metric tons mainly due to surging demand driven by post-quake reconstruction in the country. With the end of nationwide power rationing enabling local manufacturers to resume production, the country’s fastener imports declined to the normal level of around 75, 000 metric tons in the third quarter. MIRDC analysts emphasize that, although growths in developed economies in North America and Europe have lost momentum, demand in emerging countries, with slowing Indian economic growth still exceeding 6%, has continued upward steadily to drive global economic growth, as well as demand for fasteners worldwide. The seasonal boom in the auto and machinery industries in North America, MIRDC analysts say, enabled Taiwan’s fastener industry to post overall output of NT$31.7 billion in the fourth quarter of 2011, NT$29.5 billion of which in exports, with whole-year output and export reaching NT$126 billion and NT$117.2 billion, respectively. (SC) Source:chinafastener.com