Soaring costs hit Castings

13 April 2012

THE chairman of iron foundry Castings today declared its costs were the highest he had seen in 40 years.

Veteran industrialist Brian Cooke said: 'I've never known anything like it. Steel scrap used to go up £1 or £2 a month. In July it went up £25 a tonne, then a further £30 in August.'

Castings gets through 65,000 tonnes of steel scrap a year. Prices have soared amid increased demand from China and other industrial economies. That strong demand is reflected in Castings' full order book.

But the company will also be hit by a 30% increase in its £1.5m-a-year electricity bill under a new two-year contract starting in October.

'The City says energy firms aren't making enough money, so prices go up. It will eventually come through into the market through higher prices or a bloody big economic slump,' said Cooke.

Castings shares slumped 22 1/2p to 157 1/2p.

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