Foundry firms upbeat as prices surge Rs 2000/mt

Foundry prices have gone up by Rs 2,000 per metric tonne (MT) in the last month and a half and producers are expecting the prices to go still higher in same proportion, if not more, by the end of the second half of the current fiscal.

Currently foundry prices are rulling in the range of Rs 18,000 to Rs 20,000 per metric tonne depending upon their quality and requirement of buyers.

"Foundry prices have been spiralling and we are expecting a further zooming in prices at least by Rs 2,000 per metric tonne by March 2006," said Subodh Panchal, a leading foundry producer in Gujarat.

"All foundries in the country especially the ones in Ahmedabad and its closed vicinity are working at full capacity, due to demand from steelmakers. Secondly, the prices of all petroleum products have surged including oil and other fuels. Transportation cost has also gone up considerably.

Hence, we have option but to increase prices by 10-12 per cent," Panchal added. August - September is a traditional slack period, still prices have seen rising in of steel as well as raw materials. "Two months ago steel prices bottomed out and they started recovering now.

Hence, we expect foundry prices to go further up when the actual demand from steel industry begins", Panchal hoped.

A brick and mortar industry, foundry industry, is a vital sector for automobile and steel industry that heavily depend upon foundry products for their survival.

"About 95 per cent of foundries in India are categorised in the unorganised sector. Foundries of large size have already got full orders from export market as well because of good quality and time bound assured supplies. Hence, the industry shares has a bright future as long as automobile and steel makers are doing well," added Panchal.