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Wire Rod Shipment Rate Drops. Hwua Chih's November Revenue Decreased by 39%.
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2012-12-12
Stainless bolt maker Hwua Chih's November revenue dropped 38.8% (compared to October) to 128 million NT dollars. The company states that the obvious decline in November's revenue is mainly because the reinvesting Thailand plant and Indonesia plant have substantially restored wire rod stockpile, which leads to stark decline in the companiy's November wire rod shipment. Hwua Chih's revenue from Januay to November is 1881 million NT, signifying an annual decrease of 10.69%.

Hwua Chih mainly produces stainless bolts and wire rods. The supply of its wire rods are only available to the reinvesting Thailand plant and Indonesia plant. With the wire rod price down at the bottom, the Thailand and Indonesia plant started to restore wire rod stockpile, motivating Hwua Chih's revenue to reach 110 million (and  overall revenue to reach 209 million) in October. However, after the end of stockpiile restoration, Hwua Chih's Novemeber wire rod revenue quickly dropped by 3.4 million along with substantial decline in its overall revenue in the same month. Fortunately, its revenue rised a little in November thanks to increasing demand for stockpile restoration before Christmas of Amreican and European countries.

Hwua Chih states that it can monthly produce as much as 900 tons of bolts, which is the equivalent of single-month revenue of 1 to 1.2 billion NT (fully-loaded). Nonetheless, in terms of the compnay's current monthly bolts revenue of only 60 to 80 million NT, the American and European markets still seem a little dim; therefore, bolts purchase orders in December is still low. Despite that, we still see the Q4 stainless steel price seized dropping; therefore, Hwua Chih's average bolt price in Q4 is expected to be more stable than Q3. Hwua Chih predicts that the company and the two plants will acquire minor profits in Q4, regardless of exchange rates.
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