A sudden wave of closures has occurred in the screw industry chain. The industry has warned that the government's "emphasis on technology and neglect of production" coupled with geopolitical risks may cause screw factories to expand and move overseas. "Orders will be moved to overseas production, and the domestic industry chain will naturally shrink." , Taiwan’s reputation as the “Kingdom of Screws” may become a historical term.
A screw boss said that the government raised electricity prices in April and sharply increased peak electricity rates in May. Electricity prices have risen again and again. Electroplating and heat treatment alone will increase by 300 to 400 yuan per metric ton. Due to the sluggish economy, Hao Xie Li factory did not dare to raise prices this time, resulting in losses. "It is also a (response) plan to simply close it."
Wu Zonghan, global general manager of Lihan, a specialized manufacturer of special parts screws, said that the current order visibility is short, and it is not very optimistic until the fourth quarter. European customers have returned from the holidays, but so far there has been no action and the number of inquiries is very small.
Wu Zonghan pointed out that the most effective solution in the short term is of course the Sinosteel (2002) price. Sinosteel explained that the price cannot keep up with the mainland and is not much different from Japan and South Korea. The key point is that Taiwan screws do not directly compete with Japan and South Korea. The biggest competition The opponent is mainland China, but Sinosteel itself also wants to make money. How to strike a balance is wisdom.
The general manager of a listed steel mill said that a new wave of industry relocation in the screw industry is another warning sign. Because customers are afraid of geopolitical risks in Taiwan, major manufacturers such as Shifeng Screws (2065) went to Vietnam to set up factories in Vietnam to meet customer requirements, and the industry has relocated. If there are too many, Taiwan's local industrial chain will naturally shrink.
In addition, most of the companies that can move abroad are powerful and should develop into higher-end fields and bring high value-added products back to Taiwan for OEM manufacturing. Only then can the entire industry chain be comprehensively improved. But what we see now is that most of them are still making low-end products abroad, which is equivalent to treating Taiwan as a competitor and fighting against themselves. The road is getting narrower and narrower.
