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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 industrial enterprises.

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.

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