Global Fastener News

Foreign Steel & Nickel Hikes Hitting Fasteners

Jason Sandefur

Metal price hikes and fuel surcharges are driving fastener costs up, industrial fastener experts told the Los Angeles Fastener Association at a dinner meeting. Speaking about low carbon coldheaded steel, Bruce Darling of Porteous Fastener Co. explained that steel went “crazy” in the second quarter of 2004, rising to $465. A year later steel was up to $570 per metric ton before settling at $482 in the first quarter of 2006.
As steel prices leveled off, energy costs in the form of fuel surcharges began hitting fastener producers, along with rising zinc prices.
“In January 2006 zinc took off like a rocket,” Darling noted. During the first five months of 2006, zinc prices more than doubled to $1.81 per pound.
Meanwhile some fuel surcharges are as high as 30%, and RoHS, the Restriction of Hazardous Substances directive issued by the European Union, has begun costing companies.
“It’s certainly driving us crazy trying to figure out what to do because there is no domestic law on this,” stated Darling.

For stainless steel, the conditions are equally troubling. Bruce Wheeler of Star Stainless Screw said the stainless market boils down to nickel, which makes up about 40% of stainless steel’s price while accounting for only 8% of composition. This year stainless steel fastener prices have jumped 50% because of a hyper nickel market. Wheeler said Nickel has gone from costing about $3 per pound in 2002 to as much as a record $10 per pound in 2006.
“It’s a pretty wild market right now. The $1 million question is ‘When will the market turn?'”
Likewise wire supply is tight and getting worse. Wheeler said flat washers are the worst product in the line right now, with some open orders more than two years old. And little, if any, relief is expected in next 6 months.
To survive the current upswing in nickel prices, Wheeler recommended caution on buying habits. “Everything boils down to the price of nickel. Once you understand that you can get a good feel for where stainless prices are going.”

Ryan McCaffrey of R&D Fasteners said his company altered its buying habits and “bought heavy” at the beginning of 2006.
Currently some mills are reluctant to quote orders. “We’re told ‘Don’t buy big mill quantities right now,'” McCaffrey explained. Web: lafa.net �2006 Fastener News.com