6
“Today is more dramatic than 2004”
Sobering words from a Senior Steel Trader - see our American News page 24. The impact of
addressing the fastener section meeting of the Asian cost increases on US importers is virtually
Confederation of British Metalforming as we immediate because of the direct and weakened
went to print. relation between the US Dollar and the RMB in
particular.
The meeting heard, “Although world steel demand is
quite soft prices are going up and up.” Underlying In Mainland China, Baosteel and other major steel
reasons are similar to 2004 – iron ore and coking producers have already announced similar increases,
coal prices, as well as energy costs, are all increasing warning that new prices may not hold for the full
dramatically. A prime factor in availability of raw Quarter 2. Fastener industry sources in China report a
materials is continued shortages in bulk sea freight 300 RMB (28 euros) increase in the cost of cold
capacity to move ore and coal to steel producing heading wire in the last week of February, followed
nations. Iron ore contract prices for the year from almost immediately by a further jump of 10%,
April are rapidly being concluded, with increases pushing C1035 and C1010 to RMB 5,700/tonne.
between 65 and 71%. While this level has clearly Officially quoted price averages for wire rod confirm
been anticipated in latest steel price increases it is the trend. Fastener factories are reported to be
unlikely the full impact has yet fed through. contacting customers with 8 to 10% price increases
Lack of steel availability is a major issue. During for orders shipped from April 2008, and warning to
2007, Chinese participation in the world steel market expect further increases as wire costs continue to
diminished and then virtually ceased. Chinese increase and the RMB appreciates further in relation
producers’ ability to compete in world steel markets to the US Dollar.
has been radically curtailed by the replacement of
export rebates with surcharges, as well as Clearly every stage in the supply chain from raw
government measures to reduce pollution.
materials to delivered fastener has a vested interest
In Europe some mills are reported to be standing
in ‘talking up’ the situation – particularly where the
still for want of raw materials. Turkey, particularly is
participant is sitting on significant levels of inventory.
suffering from not being able to obtain supply from
That clearly risks a degree of ‘bubble’ in the
Ukraine and the CIS, where domestic steel demand
equation.
is continues to be rampant.
However, the underlying inflationary factors
The implications for cold heading wire are rapidly
becoming apparent. In Europe wire increases of over
impacting steel appear real and sustained. A handful
100 euros a tonne have been predicted for April. In
of raw material extractors, currently three companies
Asia, China Steel Corporation announced its largest
provide some 80% of the world’s iron ore, and that
ever steel price increase for Quarter 2, averaging
could still become two. There has also been major
19% for Taiwanese domestic customers. CSC will add
consolidation in the steel industry. While there may
NT$4550/ton (97 euros) to the price of wire rod.
well be sharp fluctuations along the way the cost of
The increase is substantially higher than predicted by fasteners looks certain to be driven higher once
US fastener importers recently in Fastenernews.com again.
Heinz Storch dies in February
Fastbolt chairman and founder, GmbH in Gronau, Germany, again commanded across the European
Heinz Storch died on Friday 15 growing the business rapidly industry.
February in hospital near his under his personal direction. The
home in northern Germany, at company also located to custom Heinz Storch also played a pivotal
the age of 63. built premises, which were
role in reenergising the British
substantially extended in 1998
Association of Fastener Distributors,
Heinz Storch founded Fastbolt and are currently undergoing
injecting his personal drive to
Distributors (UK) Limited, with further major expansion.
reverse long-term decline and
then partner Bernard Myers, in
establish the foundation for its
1982 at Milton Keynes, UK. The ‘Dedication to the distributor’ has
subsequent restructuring.
business grew rapidly through been a key tenet of the Fastbolt
Heinz Storch’s personal drive and business, insisted upon by Heinz
in 1990 it relocated to the custom Storch from the beginning. It
built warehouse from which it represented an integrity that,
continues to operate. alongside Heinz Storch’s
unremitting energy for growth, was
In 1995 Heinz Storch opened fundamental to Fastbolt’s success
Fastbolt Schrauben Grosshandels and the respect the man himself
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