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Metal Casting Technologies : September 2008
Foundry 2008 ASIAN requirements for quality castings made out of ductile iorn, bronze, brass, titanium, magnesium and aluminum alloys. As said before the local foundry industry has to undertake “market devlopmnet, selling and marketing work” to tap various stated upcoming business segments. Finally before targeting the international and overseas markets for castings the local foundry industry should first do the housekeeping especially in terms of reliable, responsive and transparent business partnerships for enduring multilateral win-win results. market. During the period 2000-05, the production of industrial and sanitary castings increased from $193 m to $329 m and $102.3 m to $295.7 m respectively. Around 30 to 40 large scale foundries export high quality castings worth $1 billion mainly to European OEMs. Most of the European OEMs are sourcing castings from developing countries such as India due to its availability at a lower price. Hike in price of raw materials used in foundries INDIA Hike in price of raw materials hits Indian foundries By Dr. P. C. Maity I ndia’s metal casting production has more than doubled since 2002, during 2006 it produced 7.1 mT of castings increasing it further to 8 mT in 2007 and is expected to attain a level of 11-12 mT in near future. Presently, India is the fourth largest producer of castings in the world. In spite of gradual reduction in number of foundries in India, the annual production is increasing due to production capacity expansion mostly in medium and large foundries inspired by opening of the export market as well as the increasing demand for castings in the domestic 40 www.metals.rala.com.au The price of raw materials used in foundries has increased in a unprecedented manner particularly during the last eight months. The prices have increased at frequent intervals; even sometimes within a week. This is compelling the foundries to curtail their production and to shut down their plants in some cases. The problem has been aggravated by the import of Chinese components, which are 15-25% cheaper. Some of the Indian automotive companies have started importing components from China. Under such circumstances, it is quite likely that smaller units may shut down or merge among themselves or with larger units. Many small units are also changing their business to edible oil crushing or similar activities. The extent of increase in price of raw materials in the recent past is shown in Table 1 and Table 2. Raw material Pig iron (INR*/Kg) 24.5 Steel scrap (INR/Kg) 20.7 Met Coke (INR/Kg) 20.0 Al Ingot (INR/Kg) 120 1110 Since the prices in the export market and in some cases in the domestic market are contracted on long term basis, such increase in prices of raw materials over short period is leading the foundries into heavy losses. The frequent increase in the price of raw materials has affected the production in Coimbatore, the largest cluster of foundries in India. The employment has also been affected, as many foundries had to downsize their number of employees. The export of castings from this region has been reduced recently, as reported. The Coimbatore Chapter of The Institute of Indian Foundrymen has recently expressed its concern over the increase in price of raw materials. They mentioned that the metal casting units faced an unprecedented increase in the prices of pig iron, coke, steel and scrap. This was attributed by the foundrymen to the imposed export duty on coke and pig iron by the Chinese Government. Thus the foundry units here were unable Raw Material Pig iron Mild steel scrap Cast iron scrap Coke Fe-Mn Other Ferro-alloys % Increase in price 46 47 47 42 83 30 Table 1. Increase in price of foundry raw materials between August, 2007 and March 2008 Price in Jan. 2008 Price in June 2008 % change 33.0 28.0 27.5 146 34.7 35.3 37.5 21.7 Fe-Mn (US$ / Ton) 2750 Fe-Si (US$ / Ton) Pure Mg (US$ / Ton) 4425 * Indian Rupees 4025 2225 6300 46.4 100.5 42.4 Table 2. Comparison of price of raw materials between January and June 2008