Insight

2017 has been a good year for European fastener businesses. The order situation is generally very positive due to the strong economic development in Europe and worldwide. 

Leading German fastener distributors reported sales increases reaching on average over 8% in the first three quarters of 2017. This is significantly higher than 2015 and 2016 when sales growth remained below 1% and 2% respectively. Manufacturers, too, benefit from the growing demand for fasteners. Producers such as Bulten AB reported significant sales increases in 2017. I am sure this positive trend will continue in 2018. 

As I expected, the trend towards market concentration in the fastener business has continued during 2017. Bufab Group bought the UK-based Thunderbolts Group and the Taiwanese automotive parts and fastener manufacturer Sumeeko Industries acquired the German fastener distributor Max Mothes. 

The mega-trend ‘market concentration’ goes along with the internationalisation of the fastener business. It will continue in the next years as ‘size matters’! Growth is vitally important for fastener distributors to satisfy their customers’ increasingly complex demands on a global scale. Fastener distributors need to invest strategically in technology and skills to meet these growing demands.

Whereas only twenty years ago the fastener business was considered a rather fragmented industry dominated by small and medium-sized companies, many of the market actors have made a considerable leap forward and developed into globally acting suppliers with expanding company networks in Europe and throughout the world. 

Concentration and industrialisation are driven by digitalisation. Data management, machine-to-machine communication, automated processes – all this will change our workplace in a way none of us has experienced in the past decades. To handle digitalisation is our biggest challenge in the near future.

The year 2017 ends without any anti-dumping duties relevant to our industry. The anti-dumping duties on imports of stainless steel fasteners from China and Taiwan expired as expected on 8^th January 2017. Duties on imports of carbon steel fasteners from China had already been removed in 2016 and so far no investigation for the imposition of new duties has been initiated. 

Certainly imports of carbon steel fasteners have increased since 28^th February 2016 when the European Commission decided to remove the anti-dumping duties. This is not surprising if you consider that during the period of anti-dumping duties from 2009 to 2016 imports from China had decreased to almost zero. However, the increase has not been as strong and stable as some might have expected. The volume of carbon steel fasteners from China is still significantly below the level in 2008 before anti-dumping measures were imposed. 

Furthermore, it is interesting to see that the removal of duties in February 2016 has not led to sinking import prices for Chinese fasteners. On the contrary, a price rally started and prices have continued to rise through 2017 until today. Costs for Chinese pre-products such as wire rod have more than doubled since February 2016 and increased by more than 30% in 2017 alone. As a consequence, prices for carbon steel fasteners from China have developed accordingly. Price increases during 2017 vary between different product groups but mostly lie over 20% – a development which fastener distributors did not expect to be so strong at the beginning of the year. Prices for special or drawing parts have reached levels we have in Turkey or countries in eastern Europe. 

The phenomenon of large price increases is explained by shortages of steel production in China and a growing demand for steel products in the European Union and also on the Chinese market. Furthermore, labour costs are significantly higher in China today than they were ten years ago. As we know, the shortages result from the Chinese government’s commitment to cutting air pollution through steel production restrictions and to reducing the excess global production capacity of steel. Growing steel prices clearly impact the production of fastener in other Asian countries, such as Taiwan, too. Looking at the political and economic situation I expect prices on steel fasteners to further grow in the next year.

In the light of the above it is even less comprehensible that the European Union is changing its anti-dumping law in order to protect the EU market from dumped Chinese imports of steel products. Given the dramatic increases in steel prices, I doubt that the new methodology to calculate anti-dumping duties, applicable from 20^th December 2017, will hardly have any significant effect on our industry.