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Factors affecting the prices of iron castings

There are many factors affecting the prices of iron castings. Herein, I just list some main factors for the reference to the purchasers.

First, the price of pig iron

The pig iron is the main material of iron castings, so the change of pig iron will affect the prices of iron castings directly. If the pig iron prices increase one dollar per kg, then likewise, the iron casting prices will increase one dollar per kg. If price of pig iron changes frequently, in the early of 2008, it was cost about 730 usd/ton, now it is about 576 usd/ton.

The suppliers will usually request to adjust the prices of iron castings when the pig iron price increases. As the marketing manager of Dandong Foundry in China, I have to explain this factor to our clients for many times in the past. It is fairly reasonable. Therefore, as a good purchaser, you could keep your eye on the price change of pig iron.

Second, the exchange rate of US dollar

If the suppliers quoted the prices by USD, then they must take the exchange rate seriously. So, the US dollar devaluation will cause the suppliers to request to adjust the prices of iron castings. Since the iron castings are made in China, the suppliers have to calculate all costs by RMB yuan, such as the electricity costs, worker salaries, material costs etc. So, the devaluation of dollar will reduce the profit of the suppliers directly.

In recent months, the appreciation of RMB caused the same affection as USD devaluation. The exchange rate of US dollar has reduced from 6.81 to 6.62. Which means the change of 2.8% to the costs. As for some manufacturers for exporting in China, their profits were lower than 5%. So, the appreciation of RMB has caused many manufacturers to close down or quit exporting business.

Third, the increased salaries of workers

The increased salaries of workers will cause the increased cost of manpower directly. So, the iron foundries will have to raise the prices of iron castings to keep their profits. From the beginning of 2010, the salaries of workers have increased about 30%, and are increasing day by day. Many cast workers in foundries have struck or resigned in order to request higher salaries.

There are some other factors for the prices of iron castings, such as the costs of alloy, spheroidizing agents, sand, electricity, coal, shipping, etc, but the pig iron, exchange rate and worker salaries are still the main factors. The purchasers should take attention to these factors. This article is from Dandong Foundry in China.

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