Machinery exports expanded for a 13th straight month last month, but the industry is facing unpredictable challenges relating to China’s power rationing and a stronger New Taiwan dollar, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said yesterday.
Exports grew 28.1 percent to US$2.69 billion from a year earlier, but were 9.3 percent lower than the previous month, TAMI statistics showed.
For the first nine months of the year, outbound shipments increased 29.2 percent to US$24.21 billion in US dollar terms, but expanded at a more moderate 21.5 percent to NT$679.92 billion in NT dollar terms as the local currency appreciated against the greenback, TAMI said in a report.
Photo: David Chang, EPA-EFE
Beijing’s tight emission standards have caused a power crunch in China and led to rising prices for certain raw materials and some key components, with the effects inevitably rippling down the supply chain, the association said.
“Steel mills, which are huge energy consumers, frequently have to stop production, causing the price of steel to linger at a high point,” it said. “The power outages have also hit electronic component factories, affecting the supply of critical parts such as switches, motors and controllers.”
Delivery schedules therefore have to be stretched to accommodate the shortages, and it is not clear how severe the effect would be going forward, the association said.
“The unpredictability will continue to affect the ability of Taiwanese companies to stock and ship products on schedule,” it added.
In addition, Taiwanese manufacturers face the challenge of an appreciating NT dollar, the association said.
“The US dollar recently strengthened against Asian currencies, but compared with the Korean won and the Japanese yen, the NT dollar has not fallen that much in value,” it said.
Year to date, the NT dollar has gained 1.61 percent, compared with the yuan’s 1.32 percent gain. The won has fallen by 10.36 percent, while yen has dropped by 8.70 percent so far this year, it said.
Such a “forex disadvantage” has now reached 10 to 12 percent for Taiwanese companies and is “widening rapidly,” it said.
“We would like to ask the government to be more active in stabilizing our currency and helping exporters be competitive against neighboring nations,” it said.
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