AMERICAN NEWS
“ Perception” important in fastener pricing
It isn’t just today’s price of steel. It isn’t just sea freight rates. It isn’t just fuel surcharges or supply and demand or currency. “Perception” is a key factor in fastener pricing, Stelfast Inc. president and owner Simmi Sakhuja told the Southeastern Fastener Association.
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astener manufacturers are often calculating prices six months before they will get paid. So where they perceive those factors will go makes a difference in setting today’s pricing. “I know today,” said the speaker
who prefers to be referred to by her first name. “What is next is speculation.” While steel price increases are widely publicized, there are
more subtle factors involved in determining fastener prices. For example, Taiwan fastener plants were operating on three shifts in 2008 and dropped to two shifts in 2009. Though orders are up this year, Taiwan manufacturers have not returned to three shifts, which limits supply, Simmi pointed out. “Distributors need to educate customers about what is going
on. You need to explain why five to six months from now there may be increases.” Simmi joined Stelfast in 1996 and went through an eight-year
rotation – including purchasing fasteners – before becoming president. Thus far in 2011 demand is softer than in 2008, she reported. One current factor in fastener pricing is the cost of wire rod.
Steel makers are not increasing production of rod because it isn’t as lucrative as rebar. Price changes can vary from one country to another. Steel prices are up slightly in China, but not as dramatically as in Taiwan and other countries. Steel prices also are more speculative in China than Taiwan where China Steel Corporation announces prices in advance. “We are hoping for gradual price increases,” Simmi said of wire rod prices in Taiwan. However, in China there have been more suppliers and more
volatility. As most of the Chinese manufacturers purchase their wire rod from brokers and only the largest companies buy directly from the mill. “We know where the currency is trading today,” Simmi said of China’s set currency, “It makes the future a little more uncertain as it is not controlled only by market forces.” That creates more speculation and brings up the perception
situation again. “Where do company owners think the currency is going to go 180 days from now?” Another current factor affecting China fastener prices is limited utilities. Last summer plants closed temporarily during rolling blackouts. Will 2011 be a hot summer with more rolling blackouts that amplify supply problems?
STAFDA distributors report Q4 sales rise of 10.4%
Fourth quarter sales rose an average of 10.4% and all of 2010 sales were up 5.5% for distributors participating in the Specialty Tools & Fasteners Distributors Association Trend Report.
Q T 28
1 will be slightly down an average of a half percent, according to the STAFDA distributors’ forecast. Six of nine U.S. regions forecast sales will be down 1.9% to 9.8%. In contrast, the Midwest expects an average 7.9% first quarter sales gain vs. 2010 Q4. Sales for 2010 increased for all regions except the Pacific states where sales were down an average of 4.7%.
The Mid-Atlantic region rebounded best at 12.5% and at 10.9% the South Central region also reached double-digit increase. Distributors participating in the survey averaged US$12.3 million in annualized sales.
Aerospace fastener companies join growing association
The Aerospace Industries Association enrolled ten new full members along with eleven associate members in the first quarter of 2011 to reach its highest total membership in history.
he new members included two fastener companies: Hi-Shear Technology Corp. and Phillips Screw Co. Torrance, CA-based Hi-Shear designs and manufactures aerospace fasteners and installation tools used in commercial, military and space vehicles. Founded in 1943, Hi-Shear is a part of the aerospace branch of Lisi Group, which includes aerospace, automotive and cosmetics operations worldwide.
Phillips Screw developed the original PHILLIPS drive system for the automotive industry in the 1930s. Company affiliate
Wrentham Tool has provided header tooling products and technical services to the fastener industry for more than sixty years. In the fifteen months since January 2010, AIA has grown 44%.
Fastener + Fixing Magazine • Issue 69 May 2011
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