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Ta Chen Group: Market Hit Bottom in Q3 2022 But will be Steady in 2023
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2022-12-29
Ta Chen Group (Taiwan) believes the market hit bottom in the 3rd quarter of 2022; and therefore, metal prices will cease plunging and gradually go up in the 4th quarter of 2022. The Group analyzed that among the 3 powerhouses (the U.S, China and Europe), the U.S. is the only market that is normal. As for Europe, it requires monitoring the war between Russia and Ukraine. China has lifted its lockdown but is expected to be in for a painful phase where it needs time to recover. The 3 powerhouses will slowly get back to normal. The overall outlook is not pessimistic but it calls for seeking stability.
The U.S. market accounts for 80-85% of the revenue of the Group, which has been the largest distributor of stainless steel products and industrial fasteners in the U.S. The Group emphasizes that gaining control of distribution routes means dominating the market. Having a factory is not enough to play against those who control distribution.
In the first three quarters of 2022, stainless steel products accounted for 39% of the Group's revenue, fasteners 21%, and aluminum rolled plates 40%. In the third quarter of 2022, the gross profit margin dropped to 17%, a significant drop from 33.3% in the same quarter of 2021. The Group explained that the main reason is the high cost of raw materials for production, but with the rebound of the three powerhouses in next year, metal product prices will stop dipping, product prices will remain flat or grow, and the gross profit margin will stabilize.
大成鋼
美國市場
不鏽鋼
螺絲螺帽
營收
Ta Chen Group
U.S. market
stainless steel
screws and nuts
revenue
