US scrap prices still at high level
Over 700 foundries engaged in casting & forging business in Rajkot have once again been smitten by the price rise. With the prices of raw materials shooting up, the units engaged in this business have been forced to scale down their production by 75%.
According to the chairman of pig iron committee of Rajkot Engg association (REA), Maganlal Antala the prices of pig iron & coke the main raw material for the foundries have witnessed a steady rise every month. This month the price of pig iron has risen to Rs 27,200 per MT, a rise of Rs 1000/- as compared to the price prevailing in Jan 08. Similarly the price of coke has also gone up by Rs 3000/- to Rs 4000/- per MT. It is presently hovering around rs 20,000/- per MT.
According to market reports, the prices of pig iron are again expected to increase by another Rs 1000/- per MT soon. If the prices of these key inputs continue to rise like this, foundries will find it difficult to convince their clients about price rise of their products.
Vijaya Metallica Inc MD Bhavesh Patel told ET, "In this competitive market, the sutomobile, machine tool manufacturers & othe engg industries are constantly in search of quality products at cheaper prices". He added that their production had declined by 25% due to steep price increase3 of key raw materials.
According to the industry surces the main reason behind frequent hike in pig iron prices in the escalating cost of coke which has shot up from USD 150 per tonne to USD 550 per MT which is mainly sourced from China
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