After several months of robust growth, the Taiwanese fastener industry, however, is likely to see a bad ending of 2012, as insiders confirmed that contract orders received in the fourth quarter so far have abruptly plunged over 40% compared to a quarter ago.

The overall industry meltdown is likely to cause a ripple effect of factory shutdowns through the industry in the future, given the fact that a few insiders have put employees on unpaid furloughs in response to sharp declines of contract orders.

China Steel Corp., the largest steelmaker in Taiwan and the biggest upstream supplier in the industry, pointed out that the widespread depression in the industry resulting mainly from the EU debt crisis and weak economy in the U.S. has caused the industry’s export orders to suffer a deeper decline than expected before. This, the firm noted, could be reflected in a sharp drop of its domestic sales of wire rods and steel wires so far in the fourth quarter.

China Steel furthered that the industry’s downturn, in fact, was foreseeable in the second half of this year, when downstream fastener makers significantly slowed inventory restocking to cause its single-month sales of wire rods, a seasonal hot-seller, to once drop by about 20%.

To minimize impacts on employees, most fastener companies still tend to shorten weekly working hours instead of putting workers on unpaid leaves. However, some company executives said that they won’t rule out the possibility of expanding implementation of unpaid furloughs for employees in the short term, until export orders turn up.