What is going on with the iron foundries in south China?
From the beginning of 2011, more and more
clients are transferring their orders to our foundry, so we are
wondering what is going on with those
iron foundries in south of China.
As we know, there are many good
iron foundries in South of China, especially in Ningbo and
Zhejiang areas. They are good at producing small iron and steel
castings. However, we think the energy saving and emission reduction
are affecting their production. Moreover, the reducing exchange rate
of RMB and USD is reducing their profit too.
In order to reduce emission and pollution, China government has
taken some measures. Of course, these measures have no faults, our
government just wanted to reduce the pollution and energy
consumption. These measures will benefit all people living on earth.
However, some local governments are misunderstanding these measures,
and they just timely stop the electricity supply to reduce the power
using. This action will definitely affect the regular production of
From the beginning of May, 2011, the electricity shortage has become
more serious mainly for south China, such as Jiangsu, Zhejiang,
Anhui, Hunan, Jiangxi and Chongqing. Their local governments are
strictly control the electrical using for those enterprises with
high energy consumption and high pollution. Therefore, the most
seriously affected enterprises will be the iron and steel foundries.
Most iron foundries in south China could not operate full days, and
sometimes, they just can work five days in one week, so they can not
meet the delivery time, and will have to bear the high salaries even
during off time. I think this is the main reason for their clients
to transfer their orders to other iron foundries.
Moreover, this is not the only reason. The coking plants and steel
plants are also the sufferers for electricity shortage. Therefore,
the pig iron prices
are still keeping very high even with the reduction of pig iron and
steel, and the foundry coke is become more and more expensive. All
these factors are increasing the costs of materials to iron
foundries, and so cause the price increasing to the final prices of
iron and steel castings.
All all know, the foundry industry is the main base of automotive,
petroleum, steel, electricity and more industries. So, the more and
more expensive iron and steel castings will affect the development
of all industries.
In north of China, although the electricity shortage is not serious,
and our Dandong Foundry is still keeping the regular production,
however, we are still suffering the large affection from material
costs and exchange rate.
As I said, the measures to reduce emission and pollution have no
faults, but the local governments should correctly understand these
measures, and give enough time and financial supports to those
enterprises to allow them to invite new equipments for reducing
energy assumption and pollution emission.