Fastener Supply Chain Challenges During 2021–2022

The COVID-19 pandemic created significant disruption across global manufacturing and supply chains. During 2021 and early 2022 the fastener industry experienced a combination of rising raw-material costs, constrained manufacturing capacity, product shortages, freight disruption, inflation and increasing packaging costs.

As a specialist in fasteners, Fabory closely monitored these developments and their potential impact on product availability and customers. The main pressures affecting the market during this period included:

• Raw-material prices and extended lead times
• Product shortages and limited production capacity
• EU anti-dumping duties on certain fasteners originating in China
• Sea freight and transportation costs
• Energy prices and rising inflation
• Packaging costs

Raw Material Price Pressure During 2021–2022

Raw-material prices increased significantly following the start of the COVID-19 pandemic. Production of many raw materials was reduced during the early stages of the pandemic and as the global economy began to recover supply struggled to keep pace with demand.

This imbalance contributed to longer lead times for raw materials and finished products sourced from Asia and placed additional cost pressure on manufacturers and distributors across a wide range of industries.

Product Shortages and Production Capacity

The uncertainty caused by COVID-19 during 2020 led many businesses to take a cautious approach to purchasing and production. Stock orders were postponed, maintenance activities were delayed and manufacturing capacity was reduced.

Fastener manufacturers experienced similar pressures. As industrial demand began to recover, order volumes increased faster than some manufacturers could restore capacity. This affected product availability and contributed to longer lead times and higher prices across parts of the fastener market.

European fastener distributors also began looking more actively at alternative sourcing markets. Demand for manufacturing capacity outside China increased and many alternative Asian manufacturers experienced heavily committed order books during 2021.

This combination of recovering demand, limited manufacturing capacity and changes in sourcing strategies created further pressure on product availability.

EU Anti-Dumping Duties on Chinese Fasteners

Another significant development during this period was the European Commission's anti-dumping investigation into certain iron and steel fasteners originating in China.

Definitive EU anti-dumping duties were introduced under Commission Implementing Regulation (EU) 2022/191 and entered into force on 18 February 2022. Duty rates ranged from 22.1% to 86.5% depending on the producer.

These measures affected sourcing decisions across the European fastener market and increased the importance of diversified and carefully managed supply chains.

Read Fabory's update on the anti-dumping duties coming into effect.

For more recent developments see Fabory's latest anti-dumping update.

Further information on the 2022 measures is available in the EU anti-dumping regulation for certain iron and steel fasteners.

Sea Freight and Transport Disruption

Pressure on raw materials and manufacturing capacity was compounded by disruption in global shipping.

The COVID-19 pandemic disrupted international goods flows and the circulation of shipping containers. Major ports experienced congestion while available container capacity became increasingly constrained.

Maritime transport was also affected by events such as the blockage of the Suez Canal in 2021. Together these factors contributed to substantial increases in sea-freight rates and longer transportation lead times.

Transport providers also introduced tighter commercial conditions in parts of the market including advance-payment requirements and shorter payment terms.

Road transport across Europe experienced additional cost pressure as fuel prices increased and the availability of drivers remained challenging.

Energy, Inflation and Packaging Costs

Energy prices and inflation increased significantly during this period and created additional cost pressure throughout manufacturing and supply chains.

Higher energy costs affected the production of raw materials and finished products while broader inflation increased operating, labour and transportation costs.

The packaging market was also affected by shortages of raw materials and constrained production capacity for paper and cardboard products. This contributed to higher packaging prices and longer lead times during 2021 and 2022.

How Fabory Responded to Supply-Chain Disruption