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The Current Situation of Iron Casting Suppliers in China

There are many iron casting suppliers in China, and most of them are exporting iron castings and steel castings to overseas every years. In the past, these foundries had a good time for development. However, in recent years, their situation has become very difficult.

1. The unstable prices of pig iron.

The pig iron prices are the base of cast iron, and has a direct affection to the costs of iron castings, so to the prices of iron castings. In recent years, the pig iron price has increased from 403 USD/ton in April, 2010 to 623 USD/ton in Jan. 2011. Moreover, the pig iron price is still increasing day by day. Some iron foundries are difficult to control the production costs now.

2. The unstable exchange rate of USD to RMB.

Because of the continuous appreciation of RMB, the exchange rate of USD to RMB has reduced from 6.81 to 6.60 in 2010. The 3% devaluation has caused some iron foundries closed down. Nowadays, the exchange rate is still reducing. It is difficult to estimate the level of exchange rate in 2011, but one thing for sure, the exchange rate will continuously reduce in the new year, and this will be another bad factor to exporting companies.

3. The increased workers' salaries.

Because of continuous appreciation of RMB, and increased prices of commodities in China, the salaries of workers have increased largely, according to our estimation for metal casting fields, the salaries have increased about 30% to 35%, which will cause the increase production costs to metal foundries.

Therefore, the current situation for iron casting suppliers in China is very difficult now, and maybe will be more difficult in 2011, we truly hope the stable pig iron prices and exchange rate to make metal foundries survive. After all, the metal castings are the base of industries, if the most of metal foundries were closed down, all manufacturers and suppliers in China and overseas will suffer a terrible loss.


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