In recent years, the cost of raw materials has surged dramatically, placing immense pressure on fastener manufacturers. According to Luo Baihui, the secretary-general of the International Mould, Hardware and Plastics Industry Suppliers Association, raw material costs make up over 60% of the final product price for many fastener companies. When this percentage exceeds 70%, price hikes become inevitable. Small and medium-sized enterprises (SMEs), which often lack economies of scale and complex assembly processes, are especially vulnerable to these rising costs, facing significant challenges in their survival.
Despite the growing cost pressures, the era of high production costs in China’s fastener industry is here to stay. Companies must accept the reality of rising prices, even as profit margins shrink. To maintain basic operations, many fastener firms have had to increase product prices, but this has led to repeated customer demands for lower costs. The rising cost of raw materials has become a major bottleneck, affecting both the development and survival of many businesses.
However, there is hope. As Chen Weibiao, general manager of Hangzhou Special Standards Co., Ltd., pointed out, while external factors like rising raw material prices are beyond control, internal improvements can help. Companies can focus on enhancing product quality, optimizing internal structures, increasing technical investment, accurately positioning product value, and improving customer service. These internal strategies are key to long-term success.
The fastener industry is now heavily focused on “transition†and “upgrade.†But under these conditions, most Chinese fastener companies must deal with multiple challenges: rising raw material prices, increased labor costs, and fluctuating market demand. In mid-September, raw material prices rebounded sharply, with steel prices rising by 50 yuan per ton and wire products seeing steep increases. This volatility directly impacts production costs, putting more pressure on fastener manufacturers.
In this high-cost environment, traditional advantages such as speed-to-market and cost-efficiency are fading. Looking back at the industry’s history, it’s clear that when markets boom, saturation follows. China produces a quarter of the world’s fasteners, but most are low-grade, with standard parts below 8.8 grade accounting for 45%-50%. High raw material costs have turned overcapacity into a major obstacle for the industry. With large inventories and tight cash flow, companies are forced to seek new ways to convert costs into profits—by investing in technology and developing better products to access broader markets.
Luo Baihui believes the future lies in high-end opportunities. Major national projects like high-speed rail, aerospace, highways, and airports are creating demand for high-strength fasteners. For example, Boeing plans to add 3,400 planes over the next 20 years, and the NDRC has invested 800 billion yuan in rail transit across six cities. By 2020, urban rail transit in 36 cities is expected to reach 6,560 kilometers, driving demand for high-strength fasteners worth 55-70 billion yuan. These developments offer a chance for Chinese fastener companies to move away from the “low-end†label.
For fastener manufacturers, managing procurement timing is crucial. Raw materials like iron ore and wire rods are essential for production, and since early September, carbon steel billet prices have risen over 16%, while iron ore prices have rebounded nearly 26%. Rapid price increases have made it difficult for downstream demand to keep up, and a potential price correction later in the year may be unavoidable. Companies that can monitor price fluctuations and purchase raw materials at lower costs will gain a competitive edge.
Controlling production costs and saving resources is also vital. Steel remains the dominant material in hardware fasteners, and with fierce competition, quality and cost are key differentiators. Luo Baihui highlights two main strategies for cost reduction: using cheaper alloy elements or reducing manufacturing steps like heat treatment. Some high-strength fasteners now use foreign material standards, and the adoption of cold heading steel in the automotive industry has helped promote new material usage.
Looking ahead, the fastener industry must address critical questions: How to transition from low-end capacity? How to manage raw material procurement for cost-effective production? How to reduce costs and save resources? These are not just challenges—they are opportunities for those who are proactive. In an environment where raw materials are rising, passive companies risk being left behind. To survive and grow, businesses must take initiative, strengthen internal capabilities, and adapt to market changes.
This basin mixer tap has hot and cold water to choose temperature as you like. Bathroom Wash Basin Faucet use high quality brass material in basin mixer tap which meet the European requirement . The basin faucet have protection against water block. The life time of switch is 500,000 times.
Basin Faucet,Widespread Bathroom Faucets,Bathroom Faucet,Basin Tap Faucets
HESHAN CAIZUN SANITRAYWARE CO.,LTD , https://www.caizunsanitaryware.com