Taiwan Surface Finishing Industry's Q3 Output Up 3.9% 2011

Taiwan’s surface finishing industry posted production value of NT$42.7 billion in the third quarter of 2011, for a 4% increase from a quarter ago, or 13% from a year earlier, according to statistics compiled by the Metal Industries Research & Development Centre (MIRDC).

Of the output value, NT$26.4 billion was generated from galvanized steel coils, NT$6.8 billion from color-coated steel coils, and NT$9.5 billion from surface finishing of other metals and metal products, up 21.9%, 9.4% and 19%, respectively, compared to a year ago, according to MIRDC’s figures.

Meanwhile, the industry exported NT$20.05 billion in surface-finished products for a 5.9% quarterly growth and imported NT$3.5 billion for an 18.4% drop, with domestic demand for surface finishing products growing 23.2% quarter-on-quarter to NT$26.12 billion.

The industry finished the first nine months of 2011 with production totaling NT$122.39 billion, up 13.3% from the same period of 2010. Meanwhile, exports and imports amounted to NT$58.53 billion and NT$12 billion, respectively, for a 4.4% growth and a 17.5% drop, and domestic demand rose 14% to NT$75.86 billion.

Demand for Galvanized Steel Sheets Dropping 

MIRDC analysts say that domestic demand for galvanized steel sheets, widely used as back plates of TVs, monitors and notebook PC enclosures, had weakened for several months, due partly to sluggish economies in the U.S. and Europe, and partly to growing popularity of PDAs as smartphones and tablet PCs, hence shrinking demand for large-sized LCD panels. So some Taiwanese surface finishers even witnessed capacity utilization rates decline to only 60-70% at the end of the third quarter.

The global demand for galvanized steel had also remained sluggish since early 2011, resulting from the 9.0-magnitude earthquake in Japan, mounting debt crisis in Europe, a U.S. credit rating downgrade excess supply in China.

Fortunately, MIRDC analysts say, as local steelmakers had purposefully reduced output and imports to clear inventories of galvanized steel plates and sheets, Taiwan’s market for galvanized metals will bottom out soon. Meanwhile, as global demand turned around on seasonal booms in the fourth quarter, Taiwanese galvanized steel suppliers, following footsteps of counterparts in Europe, the U.S. and Asia, had continually raised prices of domestic sales and exports, helping the industry finish the quarter with stronger-than-expected growths in output volume and value.

Compared to coating and galvanizing, the segment for surface finishing services remained in comparatively good shape, partly due to stably recovering market for new cars, and partly to persistently strong consumer demand for smartphones, tablet PCs and ultrathin laptops. However, MIRDC analysts warn that companies relying on customers from other industries will also start to suffer due to tightening credit and global economic uncertainty with decreasing orders in the months to come.

Antidumping Issues 

Antidumping has been a pressing issue for Taiwanese suppliers of coated and galvanized steel products, with judicial handling of such action to either benefit or jeopardize their overseas business.

For example, the United States Department of Commerce preliminarily ruled against galvanized steel wires made in China, claiming punitive duty from 76.34% to 235% to be imposed on such imports. But whether the anti-dumping duty will be enforced depends on the final determination announced by the International Trade Commission. If China-made galvanized steel wires sold in the U.S. are subject to heavy duties, Taiwanese suppliers will likely take over a market share to be lost by Chinese rivals, state MIRDC analysts.

Meanwhile, the Thai government has also been investigating dumping of galvanized and painted steels from China, Korea, Japan, Indonesia and Taiwan in 2011, with the implementing of anti-dumping duties pending; while some Taiwanese exporters have been brainstorming alternative solutions to cushion potential impact.

Upbeat Q4 

Driven by the seasonal boom along with hot sales of PDAs worldwide, MIRDC analysts predict that Taiwan’s surface finishing industry will have enjoyed significant growth in the fourth quarter of 2011.

http://cens.com/cens/html/en/news/news_inner_39452.html