GOVERNMENTS/ASSOCIATIONS/FASTENER GROUPS

Taiwan CSC Production & Sales Conference with Fastener Business Owners

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2021-01-25

CSC reported the status quo of global economy, steel price and fastener export in a Production & Sales Conference held on December 2, 2020. IMF estimated in October 2020 that the world’s economic growth rate would return from minus 5.2% in June 2020 to minus 4.4%. The U.S. third-quarter GDP reached 33.1% above the market’s expected 32%. The EU upped its 2020 GDP growth prediction from minus 8.3% to minus 7.4%. Despite negative GDP growth in Singapore, Malaysia and Thailand, the decrease has shrunk 50% over the second quarter of 2020. Vietnam in particular was the best performer with 1.6% economic growth, becoming the beneficiary under the U.S./China trade war with the potential to rise as the 4th largest economic entity in ASEAN, following Indonesia, Thailand and Philippines. Taiwan expected its 2020 GDP to grow at an average 3.5%, and potentially further up through 2021. China’s third-quarter GDP in 2020 was up 4.9%, looking at an estimated 1.9% growth for the whole 2020 while putting future focus on boosting domestic demand.

The American steel price shifted into high gear at USD809 per ton in November 2020 from USD500, the lowest in July 2020. The COVID virus that is contained less than desired as well as strong automotive and construction demand contribute to continuous steel price hike as a result of insufficient supply. Europe (around USD523/ton in average) and Southeast Asia (USD585/ton) both face a strong domestic demand that leads to deficient supply that drives up steel price. It is conceivable that steel demand is increasing while short-term steel supply from steel plants is limited. CSC expects the steel price to remain as is through to Q1 2021.

According to the statistics by Taiwan Industrial Fasteners Institute (TIFI), Taiwan exported 1.171 million tons of fasteners to the world in the first 10 months of 2020, down 10.56% over the previous period and the average price dipped only 0.49%. Particularly, export of wood screws and self-tapping screws had a double-digit positive growth but the unit price dropped. In contrast, bolt and nut export had a double-digit negative growth but the unit price was raised. Primarily export-oriented, Taiwan fastener industry’s construction fasteners are still looking up as the pandemic stimulates the American and European construction demand.

Product	Export Volume	Unit Price
Wood Screws	+16.55%	-3.13%
self-tapping Screws	+19.54%	-4.77%
Bolts	-15.01%	+0.32%
Nuts	-25.11%	+4.69%

Given that Taiwan’s domestic market remains to function as normal, and that some fastener companies says to have got rush orders since last July, overseas orders have apparently warmed up since last October. There was an obvious sentiment of hope floating around the Production & Sales Conference as industry participants were conversations. Meanwhile, with a prospect of raising Q1 steel price, some industry participants suggested that CSC should properly factor in export exchange rates to ensure fastener companies’ survival in the market.

Wire Import Statistics from Jan. 2020 to Oct. 2020 (Unit: Ton, Source: CSC)
Country	Low Carbon Steel	Medium Carbon Steel	High Carbon Steel	Alloy Steel	Total
South Korea	32,316	46,304	2,896	18,749	101,032
UK	55,589	-	4,483	7,225	71,812
Russia	59,443	-	-	-	60,054
Japan	7,375	466	2,909	15,364	35,768
Vietnam	17,142	-	295	16,217	33,681
Malaysia	24,626	-	1,850	222	28,028
China	-	-	-	20,611	20,611
India	14,130	-	4,867	534	20,593
UAE	11,175	-	-	5,451	16,626
Brazil	6,751	-	-	7,211	14,080
Other Countries	7,669	-	5,657	1,267	17,417
Total	236,216	46,770	22,957	92,851	419,702
Total During Jan.-Oct. 2019	203,833	31,736	17,655	97,815	379,764
Change (%)	+16%	+47%	+30%	-5%	+11%

Fastener Products Export Volume from Jan. 2020 to Oct. 2020 (Unit: Ton, Source: TIFI)
Export Destination	Export Volume	Export Proportion	Change
U.S.	535,623	45.72%	-6.34%
Germany	99,078	8.46%	-12.91%
The Netherlands	56,231	4.80%	-18.42%
Japan	55,680	4.75%	-10.47%
Canada	38,377	3.28%	-14.93%

Fastener Products Unit Price from Jan. to Oct. 2020 (Unit: TWD/Ton, Source: CSC Marketing Research)
Month Year	January	February	March	April	May	June	July	August	September	October	November	December
2018	82,577	82,682	83,126	83,416	83,769	85,518	87,113	87,741	88,830	87,792	87,364	86,363
2019	87,080	86,427	86,506	88,335	87,709	89,746	89,437	89,759	89,357	88,828	88,270	86,958
2020	86,490	84,446	84,240	85,899	83,091	82,550	83,010	82,705	85,337	82,871	-	-

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