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06. April 2008

India - Foundry industry feels price pinch

Mumbai/Rajkot - Saurastra’s foundry industry has started feeling the pinch of increasing pig iron prices, which have have increased drastically over the last six months. 
 
“There has been six revisions in the last 12 months or so and each time the rate has only gone up. This has created problems for the foundry industry,” said Bhavesh Patel, president of Rajkot Engineering Association. 
 
In August 2007, the per tonne pig iron price stood at Rs 22,530. It went up to Rs 23,575 in September and was Rs 27,040 per tonne in December. 
 
Again in the beginning of the current calendar year, the rates soared. In early January, this was Rs 27,300 per tonne, which further increased to Rs 28,080 per tonne. 
 
In March, the prices jumped on three occasions — from Rs 29,120 per tonne in the beginning, the rates escalated to Rs 31,720 and were hovering around Rs 34,320 per tonne by the end of the month. 
 
Industry sources say this has started affecting the order books. “People are uncertain about taking new orders due to the volatility in the raw material prices,” says Patel. 
 
According to him, people are avoiding large orders, which may take longer period for execution. Instead, the units here are opting for relatively smaller orders which can be quickly executed to avoid any price fluctuation. 
 
Apart from pig iron, furnace oil and coal too have seen a rise in their prices. 
 
The association, along with the Institute of Indian Foundrymen, has made representations before the Centre in this regard. 
 
Among the host of other demands, the association has requested the Centre to check iron ore exports and reduce import duty on coking coal.

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