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No Signs of Restoration in Europe Economy. Fastener Industry Must Watch, Observe, And Act
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2012-11-27

With China Steel Corporation's flat nominal closing price of rod and wire for January and February next year, rod and wire price has crashed to the bottom. However, bolt and nut industry such as Samsung and Shen Kai Precision Corporation, whose main foreign market lies in Europe, sees  no sign of restoration in Europe and therefore holds a wait-and-see attitude towards Q4 performance. The industry expects to launch work after the Chinese New Year and hopes to see an emerging demand for supplimenting inventory in order to withhold operation in the first quarter next year.

Shen Kai's revenue in October is 66.52 million, a 8.6 recession compared to September. Its recent monthly revenue is around 60 to70 million most of the time. In prospect of November and December, Shen Kai says it will keep putting on efforts but will still hold a prudent attitude to Q4.

Samsung's main foreign market lies in Europe as well, and it supplies products to the automobile market. It remains its viewpoint that the performance of Q4 is inferior to Q3, and states that the usage rate of Q4 average capacity will probably be only around 70%, a 70 to 80% recession compared to Q3.

The body corporate states that Samsung's Q3 was influenced by decreased revenue scale and the drop of capacity usage and therefore its gross margin percentage diminished below 15%. If Q4 capacity usage keeps dropping down, gross margin percentage will only be the same as Q3, or even worse.

In prospect of the first quarter next year, Samsung states that production cost is expected to maintain stable due to China Steel Corporation's flat nominal closing price of rod and wire, and expects bolts purchase orders for the first quarter next year to be equivelant to Q4 this year. Samsung thinks that situation won't get worse nor get better.

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