Global Fastener News

Taiwan Steel Prices Headed Up

John Wolz

Editor�s Note: The following is presented by Taiwan-based Fastener World magazine as part of a news column exchange with FIN.
Flourishing export orders for small fastener products have created urgent demand for low carbon steel wire and a shortage of wire materials.
Such steel wire suppliers as Chun Yu Works & Co. Ltd., Tycoons Group Enterprise Co. Ltd., New Best Wire Industrial Co. Ltd., and Chia I Industrial Co. Ltd. have decided to raise prices for low carbon steel wire by US$14.50 per metric ton to US$386. This led to an average 10% price increase for small fasteners.
� San Shing Hardware Works Co. Ltd. terms its downsizing plan �successful.� At 2001 fiscal year-end, profits rose to $100 million. The anticipated recovery of the global economy in 2002 after its sharp plunge is expected to help San Shing profits reach $300 million this year. San Shing is gradually rebuilding the capability for the stable profits it had before.
� San Shing president Ko Chi-yuen and Barry MacLean of MacLean Fogg signed an agreement for San Shing to produce screws and nuts for the U.S. fastener manufacturer. San Shing expects to increase its U.S. market share with the deal. The U.S. steel tariffs will drive raw material and production costs for U.S. fastener manufacturers, and the agreement with such a large company as MacLean Fogg will be a double win.

� The U.S. Steel & Iron Act 201 steel tariffs relate mainly to the materials of steel and iron and thus are not likely to significantly impact Taiwan�s fastener manufacturers, according to John Wu, director of the Taiwan Industrial Fasteners Institute. Wu doubts Taiwan�s allowing importing of fasteners from China will have much impact, because Taiwan is export-oriented and the local market is not large.

� U.S. 201 could affect the progress of bilateral market opening on steel and iron products across the Taiwan Strait, Wang Chung-yu of the Taiwan Steel & Iron Association suggested. Currently China is not exporting much of its steel and iron to the U.S., but the product that was U.S. bound could be diverted and create a trade problem. It is likely China will take steps to counteract imports. Since the conference on trade of fabricated steel and iron products between Taiwan and China has reached consensus of opening markets on an equal basis, Taiwan ought to advance toward market opening as agreed upon. China Steel president Kuo Yuen-tu believes the impact of U.S. 201 should be very little, and the countermeasure he suggests is to start increasing prices in the third or fourth quarter of 2002.

� China�s Export Economic Trade Ministry requested an anti-dumping investigation on imports of cold rolled steel fabricated products, marking the first trade dispute after Taiwan and China joined the World Trade Organization. It also is the first time China is using the defensive trade mechanism against Taiwan. China Steel Corp. is preparing a counteraction in the dispute. With both parties now WTO members, we wonder if such a dispute could be smoothly settled within the WTO structure.

� Taiwan�s International Trade Bureau of the Economy ministry conducted an audit in April to review products imported from China. The Bureau approved lifting of restrictions on cold rolled stainless steel fabricated products and 147 other products and lifted bans on 7,800 items.

� The recovering economy and foreign capital investment show strong promise for the NT currency in the non-capital long-term currency exchange markets. The 12-month conversion rate estimate is between 34.3 and 33.4 NT dollars to US$1.

� In an effort to encourage industries to upgrade, the Bureau chose 10 industries to focus on for the next five years: high-tech textiles, health care foods, alloys of high-class material, compounds, electronics and chemicals, cosmetics, light metal, electric automobiles, creative lifestyles, sports and recreation.

� The U.S. is expected to grant tariff exemptions to some countries to ease tensions and maintain trade relationships.\ �2002 FastenerNews.com