Global Fastener News

Taiwan Wire Rod Hike Pushes Fastener Prices Higher

Jason Sandefur

After six months of stable pricing, China Steel of Taiwan announced double-digit price hikes on all grades of wire rod for the first quarter of 2008.
Jikyoon Park, director of purchasing for XL Screw Corp., told FastenerNews.com he expected the hike to impact Taiwan fastener prices, forcing a 6% to 8% increase “immediately” when coupled with the effect of a weakening U.S. dollar.
“Some of our suppliers already notified that all prices previously quoted are null and void,” Park added.
The price of low carbon wire rod rose 10% to NT 20,350 (US$629.64) per metric ton. Mid-to-high carbon wire rod increased 11% to NT 19,900 (US$615.72) per metric ton. And cold headed quality high carbon wire rod grew 10% to NT 20,350 (US$629.64) per metric ton.
“This increase is based on rising cost of billets, oil and transportation as well as other inflationary factors,” Park explained.
Bruce Darling, vice president for materials at Porteous Fastener Co., confirmed the rise in wire rod prices, predicting the hikes “will result in a 5% to 6% increase in cost of fasteners.”
The last double-digit hike from China Steel came in the third quarter of 2006, when wire rod prices jumped NT 1,810 (US$56).
Park said China Steel is trying to close the gap in pricing with other steel mills. China Steel’s current pricing reportedly is the lowest among major international steel mills.
“However, this increased price is still very low compared to other steel mills, and I am expecting another 10% to 15% increase in the second quarter of 2008,” Park predicted.
Wire rod prices from China average about NT 22,610 (US$699.56) per metric ton for the first quarter of 2008.
Park noted that fastener prices could be headed higher in the coming months.
“The steel and wire rod price increase is too compelling to keep fastener prices where they are right now, and I am expecting prices will eventually go up as high as the 2004-2005 peak price level.”
Since the second quarter of 2004 the price of low carbon wire rod has increased 36%. �2007 FastenerNews.com