Global Fastener News

2008 FIN – Fastener Manufacturers Urged to Be Strong in Raising Prices

March 26
00:00 2013

3/26/2013 1:26:00 PM
2008 FIN – Fastener Manufacturers Urged to Be Strong in Raising Prices

July 22, 2008 FIN – The Confederation of British Metalforming is urging fastener manufacturers to “stand their ground, in a price war with buyers acting for their biggest customers – the UK’s automotive industry and white-goods firms.”
The trade association termed it “absurd” to expect component suppliers to absorb consistent double-digit increases in both raw materials and energy.
In an open letter to the end-user manufacturers, director general John Houseman wrote that CBM’s member firms who manufacture fasteners “account for only 3% of Corus’s annual rod/wire output, so when it pushes prices up, they haven’t the commercial weight to refuse.”
“Equally, I understand the buyers’ perennial mindset that they should demand ‘cost downs’, and oppose price increases by component suppliers,” Houseman acknowledged. “During buoyant economic periods, some fastener manufacturers may have chosen to absorb part of the increased costs. However, when the cost of steel, gas and electricity is rising each month, it becomes impossible.”
“I don’t think the manufacturers of our cars, our lorries, our fridges and all our other manufactured goods which require fasteners have yet realized what will happen, if this impasse continues,” Houseman cautioned. “If the buyers go elsewhere, domestic firms will lose turnover, and because their fixed overheads are so high, their margins will be eliminated. If the buyers try to source safety critical fasteners in the Far East, they will immediately encounter supply chain difficulties, lack of traceability and quality problems.”
Houseman pointed out that the EU Commission is likely to impose tariffs on cheap China-made fasteners later this year, so buyers looking for a deal today will soon have to pay more for their imports.
The rising cost of steel and energy are global issues, and OEMs will soon be forced into renegotiations with their new suppliers, whether they are in China, India, Vietnam or the Philippines, Houseman forewarned.
CBM is a trade association for companies in the forging, pressing and sheet metalforming industries. CBM has 200 members representing 20,000 employees in the UK. CBM works with the European Industrial Fastener Institute [EIFI], Euroforge and International Council of Sheet Metal Presswork Associations. Web: ©2008/2013 Fastener Industry News and Fastener + Fixing Europe.
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