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Iron Foundry and Pig Iron Industries in India

N. M. Rao

Consultant & Analyst


Foundries are workshops where metal castings are produced. Metal casting is a manufacturing process in which molten or liquid metal is poured into a mould made of sand, metal or ceramic, which contains a hollow cavity of the desired shape, to form geometrically complex parts. Such complex parts cannot be produced by other metal shaping processes like rolling, forging, drawing or extrusion. Common metals used in foundry industry are iron, steel, aluminium, copper, magnesium, zinc etc. Iron castings constitute about 80 per cent of all castings produced in India and grey iron castings form about 85 per cent of all iron castings. India is the third largest producer of castings in the world after China and USA. This paper deals with iron foundry industry and the industry supplying principal raw material to iron foundries, i.e. pig iron industry.

Production, Exports and Imports of Castings

Production of various metal castings (in ‘000 T) and total exports & imports (in million US $) during the period 2009-10 to 2014-15

Foundry industry provides employment to about 500,000 persons (another 150,000 persons are employed indirectly). Hence, estimated productivity is 20 tonnes per person per year. The vision of foundry industry is to improve the productivity to 50 tonnes per person per year by 2020 and achieve a production of 25 million tonnes. This will call for a CAGR of 20 per cent considering 2014-15 as the base. Actual CAGR between 2009- 10 and 2014-15 was 6.2 per cent. This is a tough target and can probably be achieved by 2025 in which case, CAGR required is around 10 per cent.

The world produced 105 MT of castings valued at about 198.6 billion dollars in the year 2014. The break up was: Grey iron- 45.7 per cent, Ductile iron- 24.8 per cent, Malleable iron- 1 per cent (total iron- 71.5 per cent), Steel- 10.5 per cent and Non-ferrous- 18 per cent. Country wise break up, in respect of top 10 countries, was China- 46.2 MT, USA- 12 MT, India- 10 MT, Japan- 5.54 MT, Germany- 5.25 MT, Russia- 4.2 MT, Brazil- 2.74 MT, Korea- 2.63 MT, Italy-2.02 MT and Turkey- 1.75 MT. Share of top 10 in the total was 87.9 per cent. Even though Japan’s production was about half of India, value at 19.3 US billion $ was higher than India’s 18 US billion $. This is because more than 50 per cent of Japan’s production were high value non-ferrous castings.

Foundry Industry Structure

There are about 5000 foundries in India with a total estimated capacity of 15 MTPA. About 80 to 85 per cent of them are in small scale sector. About 5 per cent are big foundries and the remaining foundries are in medium sector. Total industry size is about 18 billion dollars.

Foundry Clusters: Most of the foundries are situated in seven clusters of Agra, Belgaum, Coimbatore, Howrah, Jalandhar & Batala, Kolhapur and Rajkot. Cluster wise details are:

1. Agra Cluster: Agra cluster had originally about 180 units. The cluster virtually closed down following a Supreme Court order in 2001 for preserving Taj Mahal from pollutants. The Cluster has again become operative since last six-seven years. It has now about 80 units. To comply with the Supreme Court directive, the units use either coke less cupola (gas based) or induction furnaces. The cluster manufactures castings for Railways, engine pump sets, machinery parts, automotive parts, grills and furniture.

2. Belgaum Cluster: This cluster has about 100 foundries. They make precision castings. Sector wise production break up is: Automotive & Oil engines- 31 per cent, Pumps & Valves- 21 per cent, Electrical Motors-10 per cent, Tractors & Agricultural implements- 7 per cent, Food processing industry- 5 per cent and others- 26 per cent. 75 per cent of the foundries use conventional cupola and low ash coke. 20 per cent use induction furnaces and 5 per cent use rotary furnaces. Some foundries use a duplex process of cupola plus induction furnace.

3. Coimbatore Cluster: This cluster has about 600 foundries. Sector wise production break up is: Pumps & Valves- 46 Per cent, Food processing industry-7 Per cent, Textile machinery- 6 Per cent, Electrical Motors- 6 Per cent, Automotive- 4 Per cent and others- 31 Per cent. Most of them use conventional cupola furnace. About 10 Per cent use induction furnace.

4. Howrah Cluster: Howrah foundry cluster originally came up for supply of parts for Jute and Cotton industries. With the decline of these two industries, sanitary castings became the main product. It also caters to other sectors like agriculture machinery, tea and leather. There are about 500 units in the cluster. About 90 Per cent of them are based on cupola furnace and 10 Per cent on induction furnace. Some make only molten metal. Some others purchase molten metal and make castings. There has been practically no modernisation. Sector wise production break up: is Sanitary castings, Pump bodies & valves- 70 Per cent, Machine parts- 15 Per cent, Jute mill parts- 5 Per cent, Automotive- 5 Per cent and Steel castings- 5 Per cent.

5. Batala and Jalandhar Cluster: There are many small units in this cluster. Sector wise production break up is: Automotive & Oil engines- 8 Per cent, Tractor parts- 6 Per cent, Pumps & Fans- 10 Per cent, Machine parts- 33 Per cent, Agriculture implements- 35 Per cent and others- 8 Per cent. Most of them use conventional cupola and high ash coke.

6. Kolhapur Cluster: This cluster has about 250 units. Sector wise production break up is: Automotive & Oil engines- 42 Per cent, Pumps & Valves- 17 Per cent, Sugar industry- 6 Per cent, Tractor parts & Agricultural implements- 4 Per cent and others- 31 Per cent. About 60Per cent of the units use conventional cupola with low ash coke. Induction furnace is used by about 40 Per cent of the units.

7. Rajkot Cluster: This cluster has about 500 units. Sector wise production break up is Oil engines- 42 Per cent, Automotive/ Textile- 15 Per cent, Machine tools- 11 Per cent, Pumps & Valves- 7 Per cent and others- 25 Per cent. Most of the units use conventional cupola with low ash coke. About 10 Per cent of the units use induction furnace. The foundry centre in Ahmedabad has about 100 units.

Big Foundries: Many of the big foundries are situated outside the clusters. A list of the top foundries

Other major foundries are: HEC Limited, Ranchi (Jharkhand); Larsen & Toubro Limited, Coimbatore (Tamil Nadu) & Kansbahl (Odisha); Suzlon Foundry, Coimbatore (Tamil Nadu); Steel Cast Limited, Bhavnagar (Gujarat); Ennore Foundries, Chennai (Tamil Nadu), Amtek Auto, Gurugram (Haryana); Mahindra Hinoday Limited, Pune, Maharashtra; India Smeltie & Refining Company, Mumbai & Pune (Maharashtra); Shakti Sugar Limited, Coimbatore (Tamil Nadu); and Simplex Engineering & Foundry Limited, Bhilai & Raipur (Chhattisgarh). Simhagiri Foundry Works in Visakhapatnam specialises in manufacture of cooling plates, tuyeres, tuyere coolers for blast furnace. Aluminium Industries Ltd., Ferro Cast Private Limited, KGN Deccan Engineering Industries Private Limited etc. are some important foundries in Hyderabad.

Operational Aspects of Foundries

Improvement is needed to improve energy efficiency, for technology upgradation and skill development. Only 1500 units are having international quality accreditation. Cupola furnaces are polluting in nature. Hence, foundries are switching to coke less cupolas and induction furnaces. Yield in cupola furnaces varies between 55 Per cent and 75 Per cent, depending on the technology adopted and type of castings made. Quality control measures have to be strengthened to reduce rejections. Average coke consumption in cupola furnace in India is 135 Kg/thm against an international figure of 110 Kg/thm. Induction furnaces are technologically advanced but are expensive. Compared to Cupola, there is capacity limitation. Average electricity consumption in Induction furnaces in India is 620 Kwh/t against world average of 550 Kwh/t. Energy cost varies between 12 Per cent and 15 Per cent.

Chemical composition of raw materials and end product, sequence of charging, charge mix etc. have a bearing on energy consumption. The melting process consumes about 70 Per cent of energy. Void distribution in cupola and packing density in induction furnace are critical for achieving a required melting rate. Mould making and core making are other areas having bearing on quality.

Pig iron, coke and scrap are the main raw materials for iron foundry. All of them are indigenously available. However, some imports take place, particularly of coke and scrap. The pig iron industry has developed well in India in the last few years. Hence, practically there are no imports (20,000 to 25,000 TPA maximum). As a matter of fact, there is excess pig iron and exports amount to about 500,000 TPY. Several merchant coke plants have also come up in the last few years. However, there is overall shortage and imports have been about 3 to 4 million tonnes per year in the last few years (the bulk of it is by iron & steel plants). China is the main source for import of coke. Cast iron scrap imports have varied between 100,000 T and 200,000 T in the last seven years. There is a shortage of moulding sand. Labour cost is about 12 to 15Per cent of the total cost. Skilled labour is in short supply and good training centres are not available.

Performance of Major Foundries

Performance of three major foundries; Electro Steel Castings, Hinduja Foundries and Nelcast Limited is shown in Table-3.

Pig Iron Industry

Production and Consumption

Pig iron is the principal raw material for iron foundries. Production and consumption of pig iron during the last few years is shown in Table-4 (in ‘000 T).

Iron castings production was 5.91 MT in 2009-10, while pig iron consumption was 5.53 MT. However, in 2014-15, production of iron castings was 7.96 MT. while consumption of pig iron was much higher at 9.06 MT. The CAGR of production of iron castings during the period was 6.2 Per cent, while that of pig iron consumption was 10.4 Per cent. This discrepancy is due to the fact that induction furnaces producing steel have started consuming pig iron due to a shortage of both steel scrap and sponge iron. Pig iron is a virgin material produced from iron ore and is hence having certain advantages over scrap. Integrated steel plants make basic grade pig iron, which is more suitable for induction furnaces making steel than for foundries. Basic grade is also having export market. RINL and NINL are the main exporters. Major pig iron importing countries are Japan, South Korea, Taiwan and Thailand etc. Exports are on the decline due to lower demand for steelmaking. International prices have also come down.

In the first half of FY’17, the production of pig iron for sale was 4.739 MT (a decline of 1.9 Per cent), while consumption was 4.674 MT (a growth of 1.3 Per cent). Exports declined by 64.7 Per cent.

Projected future demand

Considering 10 Per cent rejections and 70 Per cent yield of castings in an iron foundry (30 Per cent is arising of runners and risers), consumption of pig iron in iron foundries works out to about 7.4 MT in 2014-15. Hence, the balance quantity of 1.66 MT was consumed in induction furnaces in 2014-15. This is about 5 Per cent of total metallics used in induction furnaces (production of steel by induction furnaces-28.3 MT and estimated yield from metallics-85 Per cent).

Developed countries like the USA and those in Western Europe are gradually closing down the foundries due to their polluting nature and shortage of manpower. Hence, India will have a good opportunity to further increase the exports. Assuming that iron castings production will have a CAGR of 7 Per cent in the next decade, production of iron castings in 2025-26 will be 17 MT. Pig iron required for this is about 16 MT. Draft National Steel Policy 2012 also projects a demand of 16 MT for pig iron in 2025. However, this does not include requirement of induction furnaces.

Pig iron specifications

Pig iron is used in iron foundries for production of various types of castings and also in the manufacture of steel. These uses require different grades of pig iron. IS: 13502-1992 (revised in 2005) issued by Bureau of Indian standards covers several grades to suit various requirements. Main features of this specification are detailed below. Equivalent foreign specifications are ASTM: A43 and JIS: G: 2202.

1. Limits of Alloying elements: Manganese-30 Per cent max., Silicon-8 Per cent max, Phosphorous-3 Per cent max. Chromium-10 Per cent max and others (total)-10Per cent max. If these limits are exceeded, it will be classified as Ferro alloy.

2. Supply of material of composition within limits narrower than those covered in the table, may be mutually agreed between the purchaser and the manufacturer.

3. Mass: 45 Kg with two notches or 22.5 Kg with one notch. Depth of notch shall be such as to make the pig easily breakable. Smaller sizes are acceptable.

4. Material shall be marked with cast number, grade and the manufacturer’s name. Colour code may be used as per mutual agreement.

5. Chemical Analysis: Shown in Table-5 below (in Per cent). Foundry grades 3 to 8 will have high manganese sub grades also, where Manganese content shall be 1.0-1.5. There is no change in respect of other elements.

Pig Iron Manufacturers

Up to the end of the nineteen eighties, pig iron demand was met by SAIL plants. From 1990, RINL also started supplying pig iron after commissioning of their blast furnace no. 1. From 1992, a number of pig iron plants based on mini blast furnace were commissioned. Originally, most of them were standalone pig iron plants. Subsequently, they went in for forward integration by setting up casting units or DI pipe plants or steelmaking facilities. These units also added sinter plants, heat recovery coke plants along with power plants. This has given them cost advantage. A list of major companies selling pig iron is given in Table-6 (capacity is in respect of hot metal/pig iron).

Some quantity of pig iron is available for sale from Kalyani Steel Limited, Hospet (Karnataka), Usha Martin Industries Limited, Jamshedpur (Jharkhand), Jayaswal NECO, Raipur (Chhattisgarh), and Concast Steel and Power Limited, Jharsuguda (Odisha). Besides, there are several other small (tiny) units operating blast furnaces, each having a volume of 100mÑ or less, who together contribute about 200,000 T of pig iron for sale. Further, UniMetal Ispat (taken over by Kalyani/Mukand) and SJK Steel (taken over by Gerdau) also produce some pig iron for sale. Other companies that will start pig iron production shortly are: Shree Bajrang Power & Ispat Limited, Raipur, Chhattisgarh (231,000 TPA); SKS Ispat Limited, Raipur, Chhattisgarh (500,000 TPA); Topworth Steel, Durg, Chhattisgarh (500,000 TPA); MSP Steel & Power Limited, Raigarh, Chhattisgarh (400,000 TPA) etc. Prakash Industries, Surya Global Steel (both in Chhattisgarh) and MSP Metaliks Limited, Jharsuguda (Odisha) also have plans to set up pig iron/steel plants. Hence, it is unlikely that there will be any shortage of pig iron in the future.

Performance of Pig Iron Plants

The performance of three major pig iron producers; Neelachal Ispat Nigam Limited, Tata Metaliks Limited and Kirloskar Ferrous Industries Limited

Among other companies, Sathavahana Ispat Limited’s income increased from Rs. 980 crores in 2014-15 to Rs. 1180 crores in 2015-16. However, against a net profit of Rs. 25.83 crores in 2014- 15, the company incurred a net loss of Rs. 34.35 crores in 2015-16.

Sri Kalahasti Pipes Limited earned Rs. 119.42 crores profit before tax on operating revenue of Rs. 1123.04 crores in 2014-15.

Due to excess capacity in the global steel industry, steel prices have fallen drastically (particularly in 2015-16), bringing down the prices of inputs like iron ore, coking coal, scrap, sponge iron, basic grade pig iron etc. Even though, demand remained satisfactory for foundry grade pig iron, its price could not be increased since with the high price of foundry grade pig iron, customers preferred to purchase basic grade pig iron and use ferro alloys for bringing up silicon and manganese contents. Neelachal Ispat Nigam experienced a price drop of 4 Per cent in 2014-15. Turnover of Tata Metaliks Limited declined by 16 Per cent in 2015-16 compared to 2014-15, in spite of increase in production by 6 Per cent. Pig iron sale price in case of Kirloskar Ferrous declined by 11.5 Per cent in 2015-16 compared to 2014-15. Due to decline in demand for basic grade pig iron, there was excess availability of foundry grade pig iron. Value addition in the case of pig iron is low. Raw materials account for as much as 80 Per cent of the cost of production. Pig iron prices have recovered from the lows of January 2016; but they are still not comfortable for getting good margin. Both backward and forward integration has helped the companies to face difficult times.


With Western Europe and USA closing down foundries on environmental considerations, Indian iron foundry industry is having great potential for export. Exports now account for 12 per cent and there is potential to increase this to 20Per cent. Domestic demand is also expected to remain healthy due to growth in automobile, engineering and construction sectors. Foundries have to adopt latest technologies and take suitable pollution control measures. It is also essential to have training centres to develop the skill of workmen. The pig iron industry in India is well developed and is capable of producing all grades of pig iron. Setting up coke plants (together with power plants) and sinter plants, has helped the companies to reduce cost of production. With many pig iron plants themselves have downstream casting units, they are aware of the importance of cost and quality.


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