The effects of the Russia-Ukraine war on the Fastener Industry
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The effects of the Russia-Ukraine war on the Fastener Industry

Ali Baysal 
Editor in Chief of Fastener Eurasia Magazine

 

First, the slowdown of the manufacturing industry due to the pandemic, the postponement of the fairs, then the economic problems in the world, the chip crisis, increasing inflation, the anti-dumping started by the European Union on Chinese Fastener products, the Russia-Ukraine war... These successive developments in the World continue to affect the Fastener industry.

Problems in iron and steel production and rising energy prices seriously affect producers. Wire supply in some countries has started to reach serious points.

The Russia-Ukraine war continues to shake the global economy deeply.

The war between the two countries, which are the world's largest iron, steel and aluminum producers, makes the production of many raw materials, especially these products, difficult. Finally, important news came from the Russian siege in the Ukrainian port city of Mariupol that will affect global production. It was stated that Azovstal, Europe's largest iron and steel factory, received a heavy blow as a result of the Russian bombardment. Azovstal with an annual crude steel capacity of 5.3 million tons, has five blast furnaces and two 350-tonne oxygen furnaces. On the other hand, Ukraine produced 21.4 million tons of crude steel in 2021.

When we evaluate the effects of the war in terms of steel trade, the inability of the countries in war with a total steel export of approximately 50 million tons, of which 1/3 from Ukraine and 2/3 from Russia, of supplying the markets with the steel at the moment, leads to a significant decrease in steel supply in the world and thus causing an increase in steel prices.

We can summarize the other issues that cause price increases as follows:

•    Increases in commodity prices such as ore and coal,
•    Increase in scrap prices due to the decrease in scrap supply in Russia, which is one of the important players supplying scrap to the world, and even difficulties in finding scrap to be imported.
•    Increase in energy costs and dependence on Russian natural gas.
•    Europe's plans to reduce natural gas and return to coal as energy.
•    Increases in logistics costs.

Due to the uncertainty in steel prices, it is almost impossible for manufacturers to control input costs. Therefore, it may be beneficial not to make long-term offers, to take measures against increases in dollar terms, and not to make long-term commitments.

The starting of the fairs is perhaps the only positive development for the sector. As Fastener Eurasia Magazine, we will be at Tube&Wire on June 20-24, Fastener Fair USA on May 17-19, Fastener Poland on October 19-20, Fastener Fair Italy on November 30-01.

You can continue to follow the developments in the sector on our website. www.fastenereurasia.com