Fasteners Exported from Taiwan to the EU Reached a Record High in Q1 2011, Close to Those Exported to the US

A. The Production and Sale of Fasteners in Q1 2011 in Taiwan

As illustrated in Fig. 1, the export value of fasteners exported from Taiwan in Q1 2011 reached a record high of NT$26.5 billion, a growth of 22% as compared to the same period of 2010. As illustrated in Table 1, the export amount in Q1 reached a record high of 337,000 tons, a growth of 17% as compared to the same period of 2010. The average export unit price in Q1 was NT$ 78.4/Kg. The import value in Q1 was NT$ 1 billion, a growth of 12% as compared to the same period of 2010.

Fig. 1 Analysis of Taiwanese Fastener Exports from Q2 2008 to Q1 2011

NT$ 100 million

10,000 tons

NT$/Kg

Export Value (NT$ 100 million)

Export Amount (10,000 tons)

Average Export Unit Price (NT$/Kg)

Data source: the customs office import and export databank of Taiwan

Institute of Economic Research, arranged by the ITIS of the MIRDC

Table 1. Analysis of Fastener Supply and Demand from 2007 to Q1 2011

Data source: the customs office import and export databank of Taiwan

Institute of Economic Research, arranged by the ITIS of the MIRDC

In Q1 2011, the five largest export destination countries were the US (34%), Germany (10%), the Netherlands (6%), Japan (6%) and UK (4%). Three of these five countries were members of the EU. In terms of the average export unit price, the average export unit price of fasteners exported to Japan was the highest, reaching NT$ 92/Kg and the average export unit prices of fasteners exported to the other four countries were in the range from NT$71-80 per kilo. In terms of the import value, the five largest countries were Japan (57%), the US (9%), Germany (7%), China (6%) and the Philippines (5%).

B. Market Conditions of Major Export Destination Countries

Despite the uncertainty posed by the Japanese quake on the global economy and the high unemployment rates in the US and Europe, with the strong demands of the emerging markets, in the World Economic Outlook in April 2011, the IMF pointed out that the global economic condition continues to recover and the global economic growth rate of 2011 and 2012 would be 4.4% and 4.5%, respectively.

In US market, with the easy money policy, US economy continues to recover at a slow pace. Although the import amount of fasteners imported to the US saw a growth of 21% in Q1 2011 as compared to the same period of 2010, this figure was a decline of 25% as compared to the same period of 2008. The amount of fasteners exported from Taiwan to the US in Q1 2011 showed a growth of 13% as compared to the same period of 2010, but this figure was a decline of 8% as compared to the same period of 2008. Therefore, the export value of fasteners exported from Taiwan to the US has not returned to the level before the global financial crisis.

In the EU, though the economy continues to recover in the eurozone, the problem of sovereign credit rating and financial measures have slowed down the strength of the economic recovery. Thanks to the anti-dumping taxes imposed on the fasteners exported from China to the EU, the amount of fasteners exported from Taiwan to the EU continues to grow. The amount of fasteners exported from Taiwan to the EU in December 2010 and March 2011 reached 44,000 tons and 48,000 tons (a record high), respectively. The amount of fasteners exported from Taiwan to the EU market in Q1 2011 saw a growth of 24% as compared to the same period of 2010.

In terms of the average export unit price, in Q1 2011, the average export unit price of fasteners exported from Taiwan to the US was NT$ 71.3/Kg, which was lower than that (NT$ 72.4) of 2010, and the average export unit price of fasteners exported from Taiwan to the EU was NT$ 75.1/Kg, which was lower than that (NT$ 75.5/Kg) of 2010.

C.  Overview of Industrial Issues

(1) Expected Growth of Fasteners Exported to Japan After the Quake

In Japan, 3 million tons of fasteners have been produced per year and there are about 1,600 fastener companies, which employ approx. 39,000 persons in total. Most of these companies are of mid-size and small-size enterprises and 76% of them employ less than 20 persons. In the recent years, the amount of fasteners imported to Japan remained less than 0.29 million tons (excluding 2009). Please see Fig. 2. Fasteners imported from China (70%), Taiwan (20%) and Korea (4%) have comprises 90% of all fasteners imported to Japan. About 60,000 tons of fasteners have exported from Taiwan to Japan per year. After the quake in March, limited supply of power has adversely affected its industrial production and supply chain. In addition, because more fasteners would be needed in the reconstruction, it is predicted that the amounts of fasteners exported from China, Taiwan and Korea will see a growth. As of now, because there has been shortage in certain types of products in the global supply chain, we suggest that companies in Taiwan facilitate oversea buyers’ needs so as to enter the global supply chain.

Fig. 2 Japanese Fastener Imports and Origins from 2006 to 2010

Import Amount (10,000 tons)

Market Share (%)

Import Amount (10,000 tons)

Market Share of China (%)

Market Share of Taiwan (%)

Market Share of Korea (%)

Market Share of Thailand (%)

Data source: the customs office import and export databank of Taiwan

Institute of Economic Research, arranged by the ITIS of the MIRDC

(2) European Commission will Carry Out a Sunset Review on the Stainless Steel Screws from Taiwan

European Commission has carried out the sunset review on the 6 fastener product items (73181210, 73181410, 73181530, 73181551, 73181561 and 73181570). Please see Table 2 for the market shares of these 6 product items in the past few years. In 2010, 79,000 tons of these 6 types of products were imported to the EU and the major origins were India (28%), the Philippines (20%), Malaysia (12%), Switzerland (8%), Taiwan (8%), China (4%), Vietnam (3%), Indonesia (2%) and Thailand (less than 1%). If an interim review is carried out, taxes may be lowered. If not, the existing anti-dumping taxes will remain or be removed. If the fastener industry of Taiwan facilitates such reviews, it will assist European Commission to come up with decisions favorable to Taiwan.

Table 2. Total Imports of These 6 Product Items and Market Shares of Origin Countries from 2006 to 2010

Data source: the customs office import and export databank of Taiwan

Institute of Economic Research, arranged by the ITIS of the MIRDC

(3) The Domestic Wire Rod Price of China Steel Corp. Remains Flat in June

In April and May, the domestic wire rod price of China Steel Corp. increased by NT$ 2,500/ton. Its domestic price will remain unchanged in June.

D. Conclusion

Although the Japanese quake caused some of the global production chains into a chaos and the slow economic growth of the US and Europe will inhibit the global economic growth, the increase in the domestic demand of China and India will be helpful for the global manufacturing sector. Therefore, the fastener industry is expected to turn well in 2011. Regarding the main export destination markets, US market exhibits a slower growth and the EU and the ASEAN market exhibit a big growth; the growth of other markets has returned to the level before the financial crisis. In addition, in Q1, 121,000 tons of fasteners were exported from Taiwan to the EU and this figure was close to that of fasteners exported from Taiwan to the US. Therefore, the business opportunities posed by the EU are great and the fastener industry of Taiwan should acquire CE marks to expand its sales. It is predicted that the value of fasteners exported from Taiwan will reach 118 billion and the total production value of fasteners will reach 127 billion, breaking the record again!