Coke prices threaten Foundry Industry operations
FOUNDRY industry operators are crying foul over the increase in coke prices, which they say is a threat to the viability of their operations.
Globally, the price of coke has gone up and the local producers have followed suit.
The situation is being worsened by the continuing Russian-Ukraine war, which has seen energy prices jump in the last two months, industry experts say.
Zimbabwe Institute of Foundries (ZIF) president, Mr Itai Zaba, said coke prices have risen by about 30 percent to US$365 per tonne effective 2 April 2022 and this affects the local foundry industry operations.
Given that coke is a major input, the jump in prices has an effect of pushing production costs up.
Mr Zaba said they were already grappling with tight competition from imported products from neighbouring countries and the coke prices will worsen their situation.
“The coke price increase will slow down foundry growth and affect Government’s efforts to promote import substitution,” he said.
Mr Zaba said many foundries are operating at around 25 percent capacity utilisation down
from about 40 percent last year.
ZIF has said it is committed to working closely with the Government to reduce production costs and ensure competitive pricing, which is critical in driving exports and substituting imports.
The foundry industry had set a target to increase capacity utilisation from 40 to 80 percent by the end of this year.
Contacted for comment, Engineer Victor Rakabopa, who is into coal and coke mining, said coke price increase was linked to the Russia-Ukraine war.
He also said the increase in demand for coal products from this region has also significantly contributed to price increase.
Mr Zaba, however, said the coke price increase could not be attributed to the Russia-Ukraine war because coke is a local product .
“We understand that the fuel prices have gone up by about 20 percent but this cannot justify the 30 percent coke price hike,” he said.