The raw material cost of a zinc alloy diecasting obviously depends upon the weight of the trimmed casting and the price of the alloy per tonne. An allowance is made by the diecaster for metal “loss” in the casting process, usually about 5%. This loss is mostly accumulated in furnace skimmings which result each time the metal is melted especially so when any trimmed flash or swarf is recycled. No charge is normally made for the metal content of runners and overflows, as they are completely recyclable.
Alloy Price Stability
Zinc diecasting alloys are generally sold on the basis of the price of zinc ruling at the London Metal Exchange at the time, plus a premium to cover the costs of alloying. The London Metal Exchange is a true free market that covers all the major non-ferrous metals. As a consequence prices (in $US) tend to fluctuate, the general trend being in response to the anticipated supply and demand balance for the metal concerned, but also subject to some degree to other factors such as interest rates. At first sight this might not seem a very good situation for casting buyers trying to control and predict their costs.However the ability to buy forward on the LME for periods up to 27 months means that many alloyers can offer diecasters contracts for fixed tonnages of alloy based on a fixed zinc price for similar periods.
Because the price of all raw materials fluctuate – and not necessarily in unison – it is impossible to make comparative predictions of material costs for a given application which will not be subject to change with time. Alternative but weaker candidate materials, like secondary aluminium alloys and plastics are subject to the price fluctuations of (local) aluminium scrap markets and international oil prices respectively, which can fluctuate wildly. In this circumstance any comparisons should be made based on average prices in recent months together with a view on their likely future trends.
For high volume castings the raw material cost represents a very significant proportion of the overall price of the casting. One consequence of this is that it is normal for the diecaster to review the price of the casting at regular intervals during production and adjust it up or down in line with metal price changes. When a customer wants guaranteed prices over longer periods the diecaster may be prepared to organise a fixed price for guaranteed quantities, making use of the forward price contracts. However it must be emphasised that these fixed prices are only available against firm orders that cannot be changed in quantity or significantly delayed, and certainly not cancelled. It may be wise therefore for a casting buyer to place only that quantity of castings he/she is confident of requiring on a fixed price contract and for any extra castings to be purchased at the price ruling at the time of receipt.
The second consequence when the raw material cost is a large proportion of the overall casting price is that the designer should then strive within reason to minimise the weight of the casting without making it difficult to cast or too insubstantial to withstand both use or anticipated abuse.