The cast iron prices have been increased significantly from May 2020 to Feb. 2021.
From May 2020 to Feb. 2021, the pig iron price has increased from 3000 RMB/ton to 4000 RMB/ton, so the casting material costs have been increased about 30%.
Actually, when we said the casting prices have been increased seriously, we are basing on the following two factors.
1. The prices of pig iron and alloy materials have been increased by about 30% in the past months.
2. The exchange rate of USD to RMB has been reduced from 7.00 to 6.40, so caused the USD prices increased about 8%.
All these factors have caused the casting prices increased about 20% compared with the prices in 2020. This is very high and terrible for both Chinese foundries and final clients.
Now, all we can see is, the price of pig iron is still rising, and the exchange rate is still reducing. So, we have not seen the sign of price reducing.
Personally, we think the price of pig iron materials may be stable, or reduced some in 2021. However, the exchange rate may not get back to higher. Moreover, the manpower costs have been increased year by year. Nobody is willing to work in foundries, since the work is too hard.
Therefore, we do not think the price of iron castings could reduce much in 2021. It will be good enough if the price does not go higher.
The following is the price diagram for ductile iron and gray iron casting prices from 2015 to 2021. From this diagram, we can see the current prices are very high, compared with prices in the past years.
Price Diagram for Ductile Iron and Gray Cast Iron Price Change from 2015 to 2021