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Taiwan's 2014 Fastener Production Again Sets Record High Volume

Production volume in 2014 exceeds new high of 1.812 million tonnes for second straight year

Feb 25, 2015 | By Steve Chuang

Compiled by STEVE CHUANG

With TV news reports that certain parts of the USA have seen home prices rise sizably since last year, in particular those in San Francisco, and the Greek debt deal tentatively extended, and car sales stateside increase due to falling gas prices, some say the global economic climate looks promising and should drive manufacturing and construction industries worldwide, which in turn should fuel production in the fastener sector after a serious drop in the aftermath of the global financial crisis in 2009.

Production
According to the latest statistics compiled by Taiwan Industrial Fastener Institute (TIFI), the island's trade group composed mainly of fastener manufacturers, the sector's production volume again exceeded a new high of 1.812 million tonnes in 2014 for the second straight year, up 9.31 percent compared to 1.658 million tonnes in 2013.

The sector turned out US$4.831 billion of fasteners last year, growing 10.21 percent year-on-year (YoY) over US$4.388 billion in 2013 and beating the record high of US$4.515 billion achieved in 2011, with average per-kilogram price of US$2.66, inching up 0.74 percent from US$2.64 a year ago.

Viewing long-term, Taiwanese fastener makers have generally seen encouraging growth in the decade. TIFI's statistics show the industry's production volume and value significantly surge from 1.438 million tonnes and US$2.839 billion, respectively, in 2005, to 1.567 million tonnes and US$4.315 billion in 2012, and 1.812 million tonnes and US$4.831 billion in 2014.

Based on TIFI data (see table below), the industry's production volume during 2005-2014 showed compound annual growth rate (CAGR) of 2.60 percent, compared to a stronger CAGR of 6.07 percent in production value, to which a couple factors are attributable, particularly operators' dedication to continuously upgrading products and production techniques, enhancing presence in global supply chain for higher-end applications, like aircraft and automotive fasteners.

Taiwan's fastener production volume during 2005-2014Taiwan's fastener production volume during 2005-2014
Production of Taiwan Fastener Industry (2005-2014)
Year
Production Volume
Production Value
Average Price
(per kilogram)
Weight
(1 million tonne)
YoY Growth Rate
Value
YoY Growth Rate
Value
YoY Growth Rate
2005
1.438
-10.33%
US$2.839 Bn.
4.78%
US$1.975
16.85%
2006
1.442
0.32%
US$2.921 Bn.
2.88%
US$2.025
2.55%
2007
1.398
-3.04%
US$3.295 Bn.
12.81%
US$2.356
16.34%
2008
1.380
-1.30%
US$3.595 Bn.
9.08%
US$2.604
10.52%
2009
1.017
-26.33%
US$2.352 Bn.
-34.57%
US$2.313
-11.19%
2010
1.453
42.93%
US$3.652 Bn.
55.29%
US$2.512
8.65%
2011
1.615
11.14%
US$4.515 Bn.
23.61%
US$2.794
11.22%
2012
1.567
-2.99%
US$4.315 Bn.
-4.42%
US$2.753
-1.47%
2013
1.658
5.79%
US$4.388 Bn.
1.68%
US$2.646
-3.89%
2014
1.812
9.31%
US$4.831 Bn.
10.21%
US$2.666
0.74%
Source: TIFI

Exports & Imports
In line with the positive growth of overall production, the industry's exports also hit an all-time high in 2014 for the second successive year, while imports reversed from a recession in 2013.

TIFI statistics indicate that the sector exported 1.595 million tonnes of fasteners, valued at US$4.252 billion, up 9.31 percent and 10.21 percent, respectively, YoY, over 1.459 million tonnes and US$3.861 billion in 2013, both record highs, with a price averaging US$2.66 per kilogram, edging up 0.74 percent from US$2.64 a year ago.

In the past decade, the industry's export value shows a 10-year CAGR of 6.07 percent, higher than 2.60 percent in export volume, with the average price rising from US$1.975 to US$2.666 to represent a 10-year CAGR of 3.04 percent.

From another viewpoint, the average price, however, has seen a growth slowdown since 2010, as reflected by a 5-year CAGR of 1.49 percent (based on US$2.512 in 2010 and US$2.666 in 2014). Many reasons are attributable to the anemic growth, including low-margin DIY fasteners still making up a significant share of overall production value, and, especially, the unsolved oversupply of China-made steel, which undermines international steel prices to in turn suppress growth in export price of Taiwan-made fasteners.

Taiwan's fastener export volume during 2005-2014Taiwan's fastener export volume during 2005-2014
Exports by Taiwan Fastener Industry (2005-2014)
Year
Export Volume
Export Value
Average Price
(per kilogram)
Weight
(1 million tonne)
YoY Growth Rate
Value
YoY Growth Rate
Value
YoY Growth Rate
2005
1.265
-10.33%
US$2.499 Bn.
4.78%
US$1.975
16.85%
2006
1.269
0.32%
US$2.571 Bn.
2.88%
US$2.025
2.55%
2007
1.231
-3.04%
US$2.900 Bn.
12.81%
US$2.356
16.34%
2008
1.215
-1.30%
US$3.163 Bn.
9.08%
US$2.604
10.52%
2009
0.895
-26.33%
US$2.070 Bn.
-34.57%
US$2.313
-11.19%
2010
1.279
42.93%
US$3.214 Bn.
55.29%
US$2.512
8.65%
2011
1.422
11.14%
US$3.973 Bn.
23.61%
US$2.794
11.22%
2012
1.379
-2.90%
US$3.798 Bn.
-4.42%
US$2.753
-1.47%
2013
1.459
5.79%
US$3.861 Bn.
1.67%
US$2.646
-3.89%
2014
1.595
9.31%
US$4.252 Bn.
10.21%
US$2.666
0.74%
Source: TIFI

Meanwhile, Taiwan imported 23,160 tonnes of fasteners worth US$147.58 million in 2014, up 1.76 percent and 2.82 percent, respectively, from US$22,759 tonnes and US$143.53 million in 2013. Noteworthy is that while the industry's import-dependence rate steadily dropped from 1.84 percent in 2012 to 1.27 percent in 2014 (based on volume), the average import price also plunged to US$3.372 per kilogram last year, compared to US$5.304 in 2012 and US$6.037 in 2013. Such result is partly due to operators'  efforts on developing, supplying upmarket products made locally to replace higher-priced imports.

Imported Fasteners in Taiwan (2005-2014)
Year
Import Volume
Import Value
Average Price
(per kilogram)
Weight
(1 tonne)
YoY Growth Rate
Value
YoY Growth Rate
Value
YoY Growth Rate
2005
27,290
-18.65%
US$109.174 M.
-27.72%
US$4.001
-11.15%
2006
23,695
-13.17%
US$102.422 M.
-6.18%
US$4.322
8.05%
2007
35,808
51.12%
US$108.037 M.
5.48%
US$3.017
-30.20%
2008
61,479
71.69%
US$149.710 M.
38.51%
US$2.435
-19.29%
2009
26,479
-57.32%
US$101.899 M.
-31.94%
US$3.883
59.46%
2010
24,768
-5.61%
US$131.403 M.
28.95%
US$5.305
36.63%
2011
24,018
-3.03%
US$151.153 M.
15.03%
US$6.293
18.62%
2012
28,988
20.69%
US$153.742 M.
1.71%
US$5.304
-15.72%
2013
22,759
-21.49%
US$143.537 M.
-6.64%
US$6.307
18.91%
2014
23,160
1.76%
US$147.582 M.
2.82%
US$3.372
1.04%
Source: TIFI

Export Destinations
While the U.S. remained Taiwan's largest buyer of fasteners in 2014, Europe was not far behind.

According to TIFI's statistics, exports to the U.S. totaled 631,018 tonnes to account for 39.56 percent of the total in the year, up 9.31 percent  YoY, amounting to US$1.574 billion, growing by 10.11 percent.

Meanwhile, the EU bloc absorbed around 555,000 tonnes to command a 34.7 percent share, soaring about 18.08 percent from some 470,000 tonnes in 2013. Separately, Germany, the Netherlands, the U.K., Poland, Italy, Sweden, France, Belgium and Spain among the other top-20 buyers of Taiwan-made fasteners imported 143,575, 82,315, 68,288, 39,685, 38,551, 33,831, 29,639, 25,885 and 24,760 tonnes, respectively, up with growth rates ranging 11 percent to 40 percent.

Factors behind such phenomenal growth in exports to the EU bloc include gradual recovery of localized economies in the EU due to foreseeable resolution of debt issues, increasing acceptance of  Taiwan's fasteners, more orders transferred by local buyers from Chinese suppliers to Taiwan following EU Commission's decision to levy antidumping duties on imported fasteners from China. Also, TIFI opines that the successful debut by an exhibitor group led by the organization to the Fastener Fair Stuttgart in 2013, which helped further impress buyers with Taiwanese makers' capabilities and image to bring in more orders for 2013-2014, is responsible for the growth.

Another interesting observation from TIFI's statistics is that exports to China, totaling some 22,845 tonnes and valued at US$134.055 million, enjoyed the highest average price of US$5.868 per kilogram among those to other destinations. In a nutshell, one can likely attribute such promising result to China's simmering automotive industry and brisk new-car sales, slowing but still sound realty segment, and high-speed railway construction nationwide.

Top-20 Importer Countries of Taiwan's Fasteners by Export Volume in 2014
Rank
Country
Volume
Value
Weight
(kilogram)
Share
YoY Growth Rate
Value
Share
YoY Growth Rate
1
The U.S.
631,018
39.56%
9.31%
US$1.574 Bn.
37.04%
10.11%
2
Germany
143,575
9.00%
11.29%
US$380.258 M.
8.94%
11.98%
3
The Netherlands
82,315
5.16%
7.01%
US$225.477 M.
5.30%
11.19%
4
Japan
71,389
4.48%
-7.48%
US$223.907 M.
5.27%
-6.34%
5
The U.K.
68,288
4.28%
23.98%
US$184.908 M.
4.35%
24.57%
6
Canada
46,110
2.89%
-7.09%
US$121.395 M.
2.85%
-0.28%
7
Poland
39,685
2.49%
24.17%
US$73.790 M.
1.74%
20.93%
8
Italy
38,551
2.42%
15.22%
US$92.983 M.
2.19%
19.94%
9
Sweden
33,831
2.12%
27.72%
US$100.430 M.
2.36%
26.04%
10
France
29,639
1.86%
27.48%
US$82.992 M.
1.95%
29.90%
11
Belgium
25,885
1.62%
40.81%
US$69.855 M.
1.64%
40.18%
12
Russia
25,772
1.62%
-29.92%
US$54.214 M.
1.27%
-24.74%
13
Mexico
25,040
1.57%
18.59%
US$67.478 M.
1.59%
18.58%
14
Spain
24,760
1.55%
25.83%
US$58.926 M.
1.39%
21.47%
15
China
22,845
1.43%
1.70%
US$134.055 M.
3.15%
6.93%
16
Australia
20,904
1.31%
3.96%
US$69.889 M.
1.64%
4.57%
17
Thailand
19,865
1.25%
-9.23%
US$58.567 M.
1.38%
-6.81%
18
Vietnam
17,353
1.09%
20.20%
US$46.078 M.
1.08%
12.88%
19
Brazil
14,080
0.88%
-5.42%
US$39.067 M.
0.92%
-3.27%
20
Saudi Arabia
10,880
0.68%
0.99%
US$23.086 M.
0.54%
1.86%
Others
203,408
13.90%
13.90%
US$569.796 M.
13.40%
11.48%
Total
1,595,201
100.00%
9.31%
US$4.252 Bn.
100.00%
10.12%
Source: TIFI


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