Written by Gareth Whiteford, Apex Stainless Fasteners, as part of our special 'taking stock of the 2020s' project...
Navigating the next chapter of the fastener industry
Looking back over the last five years of the fastener market, it certainly feels like it has been tested in ways that many of us never expected it to. For a long time, the fastener market was pretty much driven by the same commercial drivers. But recently, we have had to navigate global disruption, volatility and uncertainty. Looking ahead, I feel that how businesses learn from these challenges and how they respond will impact how they succeed in the future.
Looking back: Five years that redefined the market
The fastener sector has always operated in a way that you would expect from a commodity market. Price and availability have historically been the dominant drivers, shaping procurement decisions and supplier relationships alike. However, the past five years have intensified these pressures far beyond the market’s normal cycles.
Across the UK and EU, the industry has had to deal with multiple different challenges. From access to raw materials, through to transport disruption, sanctions, geopolitical tariffs and environmental policy tools (such as CBAM) that have been imposed across certain regions, these challenges have created sustained volatility that has impacted the entire supply chain.
Looking at the fastener industry as a whole, the impact has been significant. Fluctuating costs and availability has made it difficult to forecast and plan ahead. We certainly saw this across our customer base and supply chain in the last few years. This has shaken a sector that was stable for some time, in the past all you needed to keep your eye on was raw material costs and competitor pricing; unfortunately that era has finished.
What we have seen as a result of this volatility is that when the market becomes uncertain, customers look to their suppliers to provide the certainty that they feel is missing. They want help and guidance to best navigate the chaos, be that holding stock, securing supply, or just providing a consistent level of service when external conditions are anything but consistent.
Looking ahead: the next five years
While some pressures have somewhat eased, market instability is not going to disappear overnight. Regulatory change, such as the introduction of the Carbon Border Adjustment Mechanism (CBAM), will play a major role, particularly in terms of UK pricing structures which will, in turn, impact EU exports. This means the cheapest quoted finished fastener will not necessarily have the cheapest TCO. Investing in sustainability will become more and more important.
Shipping costs, that have recently been at historic lows, are already starting to increase, just this week [at time of writing] prices rose by approx 16%. This makes sense because the recent rates have not been sustainable. Add to this further changes in shipping routes that are possible based on recent history and costs (and lead times) could yet further increase. At the same time, the UK manufacturing and automotive sectors , which have been the cornerstone of the fastener sector for some time, are seeing strong declines in demand, forcing suppliers to reassess volume expectations and look to other industries or export markets where demand, volume and scale of orders are more difficult to predict.
Ongoing market adaptation
Taking these market forces into account, it’s interesting to see how businesses across the entirety of the fastener supply chain are adapting and diversifying. Chinese manufacturers, who produce a significant share of products coming into the UK, are expanding manufacturing footprints outside of their local market in order to mitigate the impact of tariffs or potential sanctions. We are also seeing demand for custom and nonstandard fasteners grow driven by the emerging demand for tailored, application-specific solutions. As a result of increased fastener specification, businesses are prioritising flexibility from a sourcing and product management perspective to drive more consistent revenue streams with customers.
Green shoots of recovery
Despite the challenges, we are seeing strong growth in a hand ful of sectors. The defence, marine and construction sectors are not only showing strong demand and growth, they are also driving increased demand for high-performance and higher margin fasteners particularly for applications where durability and corrosion resistance are key. This is why we are investing in sourcing new materials such as Duplex stainless steel as they offer our customers greater lifecycle performance and a reduced total cost of ownership.
Moving forward
The fastener industry’s future for the next few years will be shaped by those able to deliver speed to market, customer centricity and competitiveness with stability and adaptability. Strong partnerships, ongoing investments in operational effectiveness and a long-term outlook will be critical in navigating the challenges and opportunities that lie ahead.
