Insight

A review and preview of the global fastener market

Named after the Roman god who is often depicted as having two faces – due to its ability to look to the future and to the past – the Janus Perspective is a unique feature that includes a wide cross section of global fastener business leaders, who have all contributed their retrospective of 2021 and thoughts on prospects and challenges for 2022.

Sergio Milatias, editor, Revista do Parafuso

Firstly, I want to start this article by thanking Fastener + Fixing Magazine for the invitation to the Janus Perspective feature and the opportunity to talk to the global leaders of our sector about my beloved country Brazil.

I will start with the high inflation we are facing in Brazil, which has come back to hit double-digits in 2021 – something we have not seen since 2016. From October 2020, the cumulated inflation for the last 12 months is around 10.25%. Meanwhile, the growth prediction for 2021 is around 5.3%, which is a relatively positive result after a disastrous 2020.

Similar to other industrial powers, such as Asia, Europe, and the USA, prices have been high in all areas within Brazil – with prices increasing too much and too fast. A prime example is something as simple as the plastic bag most printed magazines are sent in, which jumped 92% in price, from US$2.4 to US$4.6 per kilogram. One of the key factors within the price increases has been the fuel sector, which has pulled up all prices including things such as food.

Despite the global steel shortage, Brazilian production of crude steel, from January to October 2021, hit 30.3 million tonnes, an increase of 19.2% compared with the same period in 2020. The Brazilian Steel Institute predicts that steel demand will have reached 36 million tonnes for the whole of 2021, with it predicted to grow around 2% during 2022.

With the lack of steel, as well as the global semiconductor shortage, the production of light vehicles, trucks and buses within Brazil for 2021 is reported at around 2.8 million units – with 2.03 million cars made as of the end of November 2021. Whilst this figure is slightly up on the 2.01 million produced for the entirety of 2020, it is still significantly down on the 2.94 million produced in 2019. When it comes to the motorcycles sector this is going a lot better. Up to November 2021, there were 1.1 million produced, which is 16% more than the whole of 2020 and almost 1% above total production for 2019.

For fastener manufacturers that supply the automotive sector, as well as a variety of other sectors, it was a very challenging year – with some companies not able to complete orders due to the steel shortage. Fastener manufacturers reported having production idle due to the lack of steel. In one scenario, a global auto part company asked a fastener manufacturer to sell its own steel to another fastener company – so they could produce certain lines of fasteners and thus avoiding stoppages in the production lines of some automakers.

Whilst the impact of the Covid-19 pandemic shook every company, and the lack of steel represented other challenges, overall the Brazilian fastener sector faired relatively well. Ricardo Marques Castelhano, CEO at Brazilian fastener manufacturer Jomarca, explains: “Though disastrous, the last year was good for business. Throughout 2020 we produced 26,000 tonnes of fasteners, beating the 22,000 tonnes in 2019. In 2021 the production increased a further 20% until the end of Q2, before falling 15% in Q3. For 2022 we are predicting a 15% increase, an expansion caused by the depreciated exchange rate with our currency, the Brazilian real, and the high prices from China.”