Update 25.03.14: Taiwan environmental clampdown impacting zinc plated fastener supply and prices
Earlier this month a member alerted BAFD to reports from Taiwanese suppliers on this issue. BAFD followed up with the Taiwan Fastener Traders Association and other contacts in Taiwan to obtain the following information.
The Taiwanese government has radically tightened controls over the discharge of waste effluent into water courses following a series of incidences late in 2013. These included discharges of heavy metal contaminants into the Houjin River by a Kaohsiung semiconductor engineering plant, leading to the indictment of several senior executives under environmental laws. In December an electroplating plant was also identified as polluting the same water course at levels 100 times higher than the semiconductor plant. In the north of Taiwan electroplating plants were also prosecuted and it is understood executives from at least ten companies have been charged.
On 14 March an Environment Committee in the Taiwan Legislature agreed to increase maximum fines for illegal discharge more than thirty-fold to about GBP 395,000 and increase potential prison sentences for management from 3 to 7 years. Proposed legislation will also require repayment of financial gains from illegal pollution and introduce a whistleblower clause to encourage reporting.
As a result of the clampdown electroplating plants have closed throughout Taiwan, with some fastener suppliers suggesting 80% of plants are currently unavailable to process fasteners. The inevitable short term result is substantial increases in lead times for plated fasteners - estimates vary between 30 and 60 days currently - and plating costs increased by, reports say, typically 30%.
BAFD has been told that plating companies are urgently effecting upgrades to their pollution control and seeking to reapply for environmental licences but it is likely to be 2-3 months before the issue is settled.
Update 18.03.14: Taiwan leadtimes and costs still hit by environmental controls
There are continued reports that Taiwan's clampdown on waste effluent discharges from plating and pickling plants is impacting both leadtimes and costs on zinc plated fasteners.
The clampdown followed the indictment in February of executives at Advanced Semiconductor Engineering in Kaohsiung for discharge of heavy metal contaminants into Houjin River. In December an electroplating plant was also found to have discharged nickel contaminated water into the same water course, at levels reportedly 100 times higher than the discharge from ASE. Executives from at least ten companies are reported to have been charged.
On 14 March the Taiwan Legislature's Social Welfare and Environmental Hygiene Committee reached a preliminary agreement to increase maximum levels of fines for illegal discharge from TWD600,000 to TWD 20 million (EUR 475,000) and increase potential prison sentences for management from 3 to 7 years. The new legislation will also require repayment of financial gains from illegal pollution and introduce a whistleblower clause to encourage reporting.
Taiwan fastener lead times hit by tighter environmental controls
Some fastener heat treatment and coating plants are failing to meet new more stringent Taiwanese environmental controls. As a result plants are either being closed or having to operate at reduced throughput.
One BAFD member received notification from a supplier that the shortage of processing capacity is significantly increasing leadtimes.
A TFTA contact today confirmed the situation is having a widespread effect on the Taiwan fastener industry. Restricted capacity for heat treatment and more particularly coating is said to be adding 15-30 days to lead times. Plating companies are attempting to comply with the new requirements or find other solutions but it is expected to take 2-3 months for the situation to stabilise.
It appears inevitable that plating prices will increase as a result of the restricted capacity.