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Cast iron price hike will be passed on
13:57 16 Apr 2003
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Price increases of up to 60% in the first quarter of 2003 in cast
metal foundries' key raw materials will be passed on to all sectors
of the industry that use iron castings, the Cast Metals Federation
(CMF) has warned.
In the first two months alone, ferrous foundries have experienced average price increases of 60% for ferro-silicon, 25% for ferrous scrap, 20% for pig iron and 20% for foundry coke.
The increases are a result of developments in the international market, such as Russia limiting the amount of scrap metal it exports and China wanting to produce more steel and demanding more raw materials.
CMF chief executive John Parker said: "In the current climate, an increase in the cost of any of these raw materials would be difficult to bear, but with an increase in four commodities in the same time frame, many foundry operators have little option but to recover these increases through casting prices.
"With the international demand for these commodities remaining strong, cost pressures on ferrous foundries are likely to remain firm for the immediate future," added Parker.
The CMF has told its members to warn customers about the forthcoming price hikes and to explain why they will have to increase castings rates.
The Society of British Water and Wastewater Industries has got wind of the price increases and issued a press release to its members warning that costs are likely to be passed on through the water pipeline supply chain.
If the price of metal pipes goes up will this increase the demand for plastic pipes? Durapipe marketing manager Martyn Rowlands doesn't think so.
"Plastic manufacturers are also facing pricing pressures from all raw material suppliers because of international developments, so at the moment, it would be unfair and unrealistic to compare costs of both plastic and metal pipes."
Martin Topps at pipe manufacturer Viking Johnson told CJ he was not aware of any price increases from their metal castings suppliers.
"We have long-term fixed price contracts with our suppliers, so basically they're not allowed to put the prices up. We've got three- and five-year deals with most of them," he said.
"We also have price escalation clauses with our customers so that we cannot increase our prices either," Topps added.
In the first two months alone, ferrous foundries have experienced average price increases of 60% for ferro-silicon, 25% for ferrous scrap, 20% for pig iron and 20% for foundry coke.
The increases are a result of developments in the international market, such as Russia limiting the amount of scrap metal it exports and China wanting to produce more steel and demanding more raw materials.
CMF chief executive John Parker said: "In the current climate, an increase in the cost of any of these raw materials would be difficult to bear, but with an increase in four commodities in the same time frame, many foundry operators have little option but to recover these increases through casting prices.
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"With the international demand for these commodities remaining strong, cost pressures on ferrous foundries are likely to remain firm for the immediate future," added Parker.
The CMF has told its members to warn customers about the forthcoming price hikes and to explain why they will have to increase castings rates.
The Society of British Water and Wastewater Industries has got wind of the price increases and issued a press release to its members warning that costs are likely to be passed on through the water pipeline supply chain.
If the price of metal pipes goes up will this increase the demand for plastic pipes? Durapipe marketing manager Martyn Rowlands doesn't think so.
"Plastic manufacturers are also facing pricing pressures from all raw material suppliers because of international developments, so at the moment, it would be unfair and unrealistic to compare costs of both plastic and metal pipes."
Martin Topps at pipe manufacturer Viking Johnson told CJ he was not aware of any price increases from their metal castings suppliers.
"We have long-term fixed price contracts with our suppliers, so basically they're not allowed to put the prices up. We've got three- and five-year deals with most of them," he said.
"We also have price escalation clauses with our customers so that we cannot increase our prices either," Topps added.
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