Casting exporters hit by uptrend in pig iron prices

Written by Corporate Bureau | Kolkata, Oct 8 | Updated: Oct 9 2007, 08:38am hrs
Exporters of sanitary castings are crying foul over the steep increase in prices of pig iron and foundry grade iron, which has added to the pressures of the rising rupee and higher ocean freight.

Rakesh Shah, chairman of the Engineering Export Promotion Council (EEPC), said steel and pig iron are the main inputs for the engineering industries and the price hikes are hurting exports.

Not only have prices gone up, but the castings industry is facing a shortage of foundry-grade iron since Iisco, a major producer, has been switching to steel-grade iron ever since its merger with Steel Authority of India Ltd.

Shah said pig iron manufacturers in the east like Iisco and Tata Steel in West Bengal and Kalinga and Neelanchal in Orissa seem to be increasing prices in tandem.

SAIL's Iisco Steel Plant increased its price from Rs 16,485 per tonne in September to Rs 18,335 per tonne on October 1, in what he said is the largest increase over the past decade.

Ravi Sehgal, eastern region chairman of the EEPC and managing director of Carnation Industries Ltd, a major exporter of sanitary castings, said eastern India exports around 2 lakh tones of castings a year.

They are now being priced out of the US market by the uptrend in pig iron prices.

He alleged that manufacturers are selling pig iron cheaper in distant Punjab and Uttar Pradesh.

The castings industry here employs 100,000 directly in West Bengal alone while another quarter million people are associated through jobs and contracts.

Sehgal urged SAIL to dedicate a small fraction of its production for pig iron, and the government must step in to ensure availability of raw material for export production.