Taiwan fastener exports rose 14% to NT$30.2 billion in the second quarter of 2011, exceeding NT$ 30 billion per single quarter for the first time driven by solid demand worldwide, according to statistics from the Metal Industries Research & Development Center (MIRDC).

Taiwan's overall fastener output also achieved 14% growth to NT$32.5 billion, with 93% of its output exported in the second quarter. Local market demand grew 10% to NT$3.3 billion.

Taiwan fastener output increased to NT$61 billion during the first six months of 2011 with exports increased 20% to NT$56.7 billion and imports up 12% to NT$2.1 billion year on year. The local market’s demand for fasteners grew 17% to NT$6.4 billion.

The U.S imported 34% of Taiwan’s fasteners in the first half of 2011 as the biggest importer, followed by Germany (10%), the Netherlands (6%), Japan (6%) and the U.K. (4%). Fasteners shipped to Japan demonstrated the highest average price of NT$93.4 per kilogram compared to those of the other four countries.

Japan, the U.S., China, Germany and South Korea were Taiwan’s top-five fastener suppliers, commanding 53%, 10%, 7%, 7% and 5% shares, respectively, in the first half of the year.

Challenges

MIRDC analyzed that there were several factors that will have negative impact on Taiwan’s fastener industry including Europe’s debt crisis, American economy’s uncertainty, material price hikes and the credit tightening worldwide.

Taiwan fastener exports to the EU grew 30% in the first half of the year compared to a year earlier. Export volume hit a new high to 48,000 metric tons in May due to strong demand in Germany, France and the U.K. and the anti-dumping duties imposed by the EU on China-made fasteners. However, Taiwan fastener exports will be likely influenced by the austerity measures and lingering debt crisis in Greek, Italia and Britain in the coming months of this year, especially when Germany and France’ GDP growths have stalled, CENS reported.

Opportunities

While Taiwan fastener exports may encounter various challenges in the future it still will embrace many opportunities, MIRDC reported.

First, China Steel Corp., the largest steelmaker and wire rod supplier in Taiwan, invested a new factory in China mainland in July, in which the steelmaker can produce titanium and Ni-based alloy, higher-grade die steel and stainless steel. Such titanium alloy billets will be shipped back to China Steel’s factories in Taiwan to produce steel plates and wire rods. The analysts commented that the titanium alloy wire rods will be widely supplied to local fastener makers to produce higher-end fasteners so as to improve product caliber and margins.

Second, the increasing demand for wind turbine fasteners worldwide will offer Taiwan’s makers a good opportunity to expand their businesses. Take India for example, the company’s demand for this kind of fasteners is growing rapidly. Sundram Fasteners Ltd, part of the TVS Group, was reported to set up a plant at an investment of Rs 50 crore to manufacture special fasteners for the wind energy sector in June.

Finally, Taiwan’s fastener makers will benefit from the EU’s growing concern about dumping by its competitors. The MIRDC said the EU commission had recently begun investigating dumping by Indian makers of five types of stainless steel screws (coded 73181210, 73181410, 73181530, 73181561 and 73181570). Exports of the category to the EU surged to 21,000 metric tons in 2010 from less than 1,000 tons in 2005. This will be likely to promote distributors to turn to Taiwan-made alternatives.

Exports for second half remain growth

Although the global economic downturn will extend, MIRDC analysts predicted that Taiwan’s fastener industry will keep growth in the second half of the year due to the strong demand from the emerging economies and buoyant global auto markets.

Taiwan fastener exports is forecast to be about NT$30 billion for the third quarter, and NT$117 billion for the whole year, with full-year production value up 15% to NT$126 billion from NT$109.8 billion in 2010.

Value Unit: NT$1 billion
Data source: MIRDC

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