Global Fastener News

Market Challenging 4% to 8% Price Increases for Fasteners From China

John Wolz

China cut the 13% export rebate tax on steel fasteners to 5% along with many other products leaving port beginning July 1, and prices have already jumped.

“Prices are already up on some items from some vendors,” Bruce Darling of Porteous Fastener Company reported. “Prices have gone up 8%, then down a little, and then up again. Brokers are trying to feel out the market and where the competition is going with their prices. It will take another month to settle down.”

J.P. Park of XL Screw finds price changes are varying among suppliers. “The market function is coming into play,” Park observed. “One supplier raises prices 8%, but begins losing business. Some companies raising prices less are gaining business.”

Other market factors are affecting prices, Park added. A slowdown in the construction market in the U.S. is lowering demand. A shortage of container space is driving up ocean freight costs, though Park noted that XL is protected by a shipping contract.

North American distributors may not feel the full impact of import prices for several months, Park explained. XL frequently prices on “weighted averages” of existing and incoming stock so prices will climb according to incoming shipments.

Taiwan and other countries could benefit from China’s price increases. Darling predicted Taiwan “will get some business but not a big windfall. Most of the factories have switched from low carbon parts to medium carbon or specials and won’t go back easily. We are seeing some upward movement of prices from Taiwan. Business has been slow and as steel prices have increased they had steel from prior purchases and have not had to raise prices. Even though steel was held firm by China Steel Corp. during the last announcement, factories have used up all of their old steel and are having to replace it with higher priced steel. Large factories in Taiwan have been regularly moving their prices as the steel announcements were made.”

The rebate cuts have also forced European importers to accept higher prices to ensure outstanding orders are produced and shipped, Fastener & Fixing Europe editor Phil Matten reported. Concessions on price vary, but the picture in Europe suggests “most importers are having to make immediate and significant concessions, which implies that the inflationary effect of the rebate cut will be felt in the market quickly.” �FastenerNews.com and Fastener & Fixing Europe