Cast Iron Price Trend and Production Costs in 2011 of China
After Chinese New Year (CNY) holiday, the
cast iron prices in China have been increased largely, and this
change was sudden and serious, so many clients were doubted about
what reasons have caused the price increasing, and what price trend
will it be in 2011.
The main influence factors to cast iron prices include pig iron
price, exchange rate of currency, manpower cost and the prices of
other related materials.
1. Pig iron price
The pig iron cost will affect the cast iron prices directly. For
example, if pig iron price increased 100 USD/ton, then the prices of
iron castings will increase 100 USD/ton.
In August, 2010, the pig iron was about
550 USD/ton, in December, 2010, it was about 620 USD/ton, and in
March, 2011, it has increased to 650 USD/ton. You could see the
large increasing in the past one year.
Moreover, the pig iron is very unstable
near 650 USD/ton, and many sources estimated the price will still
keep increasing in 2011.
2. Exchange rate of USD to RMB
As for the buyers from USA or purchasing iron castings by USD
currency, the exchange rate of USD to RMB will directly and severely
affect the cast iron prices. As for all iron foundries in China,
such as Dandong Foundry, we calculated our production costs by RMB,
but we quoted to the clients by USD. Therefore, if the exchange rate
has large decreasing, then it will directly affect our profit since
our production costs do not have any change. So, large decreasing of
exchange rate will cause the price adjustment.
From 2008 to today, the exchange rate of USD to RMB has decreased
from 7.09 to 6.56. Quick and Severe.
3. Manpower cost
Manpower cost, e.g. workers’ salaries, also affect the cast iron
prices. In 2011, the prices of the articles for daily use and houses
have increased largely, moreover, many new construction works demand
more building workers, so the workers’ salaries increased largely
after CNY in China. Most iron foundries in China have increased
their salaries about 30% in the early of 2011. Even so, more and
more workers quitted for more higher salaries.
Increased salaries have affected not only the cast iron prices, but
also machining costs. The machining in China has become more costly
4. Other related materials
The resin cost has increased from 9000 RMB/ton into 19000 RMB/ton
because of the shortcoming of raw materials. The resin cost
increasing has deeply affected the prices of
resin sand castings and
shell molding castings.
The painting workers’ salaries and paint costs have increased too,
so largely affected the painting and coating costs.
Therefore, the above factors have caused the increasing of cast iron
prices in China.
In 2011, the pig iron price is very unstable, we can not predict its
trend, but unlikely it could reduce since all articles have become
more expensive. The exchange rate should still keep decreasing from
news. We just hope it does not reduce too quick. For workers’
salaries, although they have been adjusted after CNY, maybe it need
to be adjusted again in May if the prices of all articles still keep
Of course, Chinese government is trying to control the prices of all
articles, so we can not jump to predict the price trend of iron
castings, but personally, I do not have the positive attitude.
For the latest prices for grey iron, ductile iron and carbon steel
castings, you could visit the homepage of
Dandong Foundry, we
updated the prices and price trend timely.
Main Casting Products|
Cast Iron Plate
Manhole Cover Casting
Warping Head Casting
Ductile Iron Belt Pulley
Cast Iron Flywheel
Boiler Ash Door
Cast Iron Stove Grate
Cast Iron Brackets
Cast Iron Weight
Large Cast Steel Bracket
Cast Iron Drainage Pipe
Cast Iron Pipe Fittings
Burner Grates for Gas Stove
Grey Iron Counter Weight
Cast Iron Axle Support
Cast Iron Blocks
Cast Iron Truck Castings
Cast Iron Tractor Parts
Cast Iron Stove Parts
Pump Shell and Valve Body