Indian foundries under Crisis
Indian Foundries are facing acute crisis as the domestic prices of key raw materials surge ahead of international prices. The trend has sharpened in the last six months. The fourth largest foundry industry is facing frequent price revisions.
About 30-50% of scrap & metcoke are imported as welll as the alloys.
The domestic prices of pig iron was USD 850 per ton against USD 610 in china. While the domestic prices are unviable the imports are cumbersome & not economical as the quantities by individual foundries are uneconomical to import.
While India is allowing almost free export of iron ore, China is restricting export of metcoke by imposing export duty of 25% thereby making the export of coke difficult thereby resulting in huge price increase.
Since the Chinese now have cost advantage of 20-25%, the price competitiveness of Indian Castings exporters is severely eroded as most contracts are at a fixed price for a long period & domestic buyers also donot consider price revisions on such frequent basis. As a result many foundries have cut production by 50%.
The Government is considering revision of iron ore export duty structure. The foundries have appealed to the Government to ensure that the domestic industry gets raw materials at reasonable prices.
"We have appealed to the Government to control iron and pig iron exports with appropriate duty structure," says C. R. Swaminathan, chief executive of PSG & Sons Charities Metallurgy and Foundry Division. The import duty on pig iron and metallurgical coke should be scrapped. The foundry industry has also sought removal of all restrictions on steel scrap import.
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