India: Foundry sector faces margin pressure amid rising costs, supply constraints

• South India markets see mild correction; Kolhapur leads decline
  
  
• Casting demand muted amid unresolved foundry-OEM price talks
  
  

Ferrous scrap prices across India's key foundry hubs continued to show a downward-to-stable trend w-o-w on 5 May 2026, reflecting subdued casting activity and cautious buying by foundry operators. Price corrections remained moderate this week, indicating persistent weak sentiment with limited aggressive selling.

Cost pressures and supply-side challenges weigh on sector

Indias foundry sector is going through a challenging phase as rising production costs continue to strain manufacturers. Foundries are grappling with elevated input costs but are unable to pass these increases on to OEMs, auto makers, and engineering buyers, leading to a sustained squeeze on margins with no immediate relief in sight.

On the supply side, conditions remain equally tight. Suppliers are facing pressure from aggressive OEM auction prices, which are impacting realizations. At the same time, shortages of processed materials such as plate cutting scrap, along with labour and vehicle constraints, are causing operational delays and disrupting day-to-day market activity.

Region-wise scenario

Western India (Kolhapur)

Kolhapur witnessed the sharpest correction among regions, primarily in foundry-grade scrap.

Foundry plate scrap prices dropped by INR 800/t to INR 40,700/t.

CR busheling prices remained stable at INR 43,500/t.

The decline was driven by weak demand from engineering segments and sufficient inventory levels in the market.

South India

The southern markets witnessed mild corrections, with largely stable trends in CR busheling, indicating cautious procurement.

Coimbatores foundry plate scrap prices declined by INR 200/t to INR 43,500/t.

Chennais foundry plate scrap prices fell by INR 250/t to INR 42,000/t.

CR busheling prices remained stable:

Coimbatore held steady at INR 45,500/t.

Chennai remained unchanged at INR 44,000/t.

The marginal correction reflects continued weak offtake from auto-linked casting units, while price stability in busheling suggests relatively balanced supply.

East India (Kolkata)

Kolkata prices remained relatively stable with only a marginal correction.

Foundry plate scrap prices declined by INR 200/t to INR 39,300/t.

The market continued to be supported by steady infrastructure-linked casting demand, limiting sharper downside.

Outlook

The market is currently in a wait-and-watch mode. The core issue remains unchangedcosts have increased across the value chain, but buyers are unwilling to accept higher prices. Until OEMs and other end-users agree to price revisions, demand is likely to remain subdued, and the market is expected to stay under pressure.