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56
Forum told prices could double year on year
At Fastener Fair, Phil Matten delivered a “Even within the space of the two day show decision on preliminary antidumping tariffs drew
hard-hitting analysis of the factors propelling the situation changed dramatically,” explains nearer. Depending on investigators’ interpretation
the cost of all types of steel fasteners along Phil. “On the first day I was speculating, based of one of the most complex antidumping cases
the steepest inflationary track witnessed in on discussions in Italy the week before, that addressed by the EU, the application of tariffs
decades. wire rod prices in Europe would increase by, could, quite feasibly said Phil, mean fastener
Updating his major article, published in the perhaps, 200 euros per tonne at the beginning prices doubling year on year.
last issue of Fastener & Fixing Magazine, Phil led of July. By the second day two manufacturers in One forum attendee summed up the feelings
an Open Forum on each show afternoon, at the audience were able to confirm that in- of many. “It’s tough to hear but this presentation
which he confirmed there was ‘little sign of creases of 250 euros per tonne would hit their gave me the clearest understanding of these
inflationary pressures abating”. Audiences of production costs within weeks.” issues I’ve obtained from any source. Phil’s final
exhibitors and visitors saw a detailed While current circumstances were exceptional reminder about the cashflow implications of
presentation of the factors, from iron ore and and some level of correction was inevitable, if these increases is something I’m taking straight
coking coal through to the potential risk of very difficult to predict, Phil argued that a long back to my business. All we have to do now is
antidumping tariffs on Chinese fastener product, term inflationary trend for fastener products get our customers to recognise that fastener
likely to impact fastener pricing over the coming appeared an unavoidable reality, leaving the companies like mine are on the receiving end of
months. supply industry and its customers no choice but pressures that are simply outside of our control.”
“The problem is that the whole situation is to come to terms with it. “Cash flow projection is definitely a serious
extraordinarily dynamic,” says Phil. “At the Consolidation meant a more structured steel consideration for distributors,” concurred Phil.
forum we discussed iron ore contract prices market, more specialisation, a tighter balance
“So too is the imperative of ensuring that
increasing by 65-71% in April this year. No between supply and demand and more robust
industry customers understand what is
sooner is that said and Rio Tinto agrees market pricing, he said. A small number of
happening. It was clear from audience response
increases with Chinese steelmakers ranging powerful mining companies, together with the
during, and particularly after, the forums that the
from 80 to 95% to take into account the lower major steel players had savoured strong profits
level of recognition of these issues still varies
sea freight costs for Australian ore. BHP Billiton over recent years, and were intent on holding
widely within the UK fastener industry, let alone
is now saying even that figure is not high on to them.
in its customers. While it is, indeed, tough to hear
enough and that they will be seeking increases The prospect that the European Commission
what is going on and harder still to communicate
of over 100%.” may, within a matter of weeks, apply
In addition to the impact of iron ore and coke antidumping tariffs on an extensive range of
to customers, in the knowledge that a price
cost increases on world steel prices, the fasteners from China, threatened to further
increase may well drive them to the market, it is
presentation explained other contributing exacerbate the situation, the forum audience
nevertheless a reality that is very unlikely to go
factors, including bulk sea freight, currency was told. A protracted EU investigation, which
away in the short term, and possibly not even in
exchange trends, as well as energy and labour started in November 2007, meant growing
the longer term.”
costs on the prices of finished fastener products uncertainty for fastener importers as the 9
from Asian and European sources. August 2008 deadline for a
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