Metal prices and open quotes: how to keep a casting quotation fair and defensible

Suppose a quote for two thousand gunmetal valve bodies goes out at one copper price. Seven weeks on, the order returns at that rate. Copper has climbed. Pour at the old price and every lot may lose money; ask for more and you may look like a foundry that cannot hold a number. A casting quote stays fair when it names the metal rate it assumes and the published reference behind it. Add the day the reference is read and how long the conversion charge holds, and a revision becomes a sum.

Why "valid for 30 days" does not protect you

The usual validity line protects the offer, not the run. The buyer reads it as the time allowed to say yes. Once the buyer has said yes, the price is expected to last as long as the schedule, which may run for many releases.

Metal is the part of a casting price that moves. In a bronze or gunmetal casting it is most of the price. In a heavily cored grey iron casting, moulding, cores and fettling carry more of it. The same move in pig iron or scrap then shifts the total less. Your cost sheet shows which kind of part you are quoting, and that share decides how much of the price should follow the metal.

Split the price into metal and conversion

A purchase officer can accept a revision when the part of the price that moved is plain. So quote two numbers per piece, not one.

The metal portion is the metal each casting consumes, multiplied by the assumed rate. Charge it on the finished casting weight plus a stated melting loss allowance. Runners and risers go back into the furnace, so do not bill them as if they were lost; a buyer who knows foundries will ask.

The conversion charge is everything else: moulding, cores, pouring, fettling, shot blasting, testing, overheads and your margin. You control this part, so you can hold it firm for a stated time or quantity.

A buyer who wants a per-kg rate can still have one. Split the per-kg rate the same way, and print the weight you assumed for each part number.

The clause, in words a purchase officer can sign

Put this under the price table and fill in the brackets from your own cost sheet.

Basis of price
1. Metal rate assumed: ₹(rate) per kg of (alloy), being the (named reference) on (date).
2. Metal per casting: (finished weight) kg plus (allowance) per cent melting loss.
3. Conversion charge: ₹(amount) per piece, firm until (date) or (quantity) pieces, whichever comes first.
4. Revision: the metal portion follows the reference as read on the first working day of the month of pouring.
   If the reference moves more than (band) per cent from the assumed rate, the metal portion moves up or down
   by the same amount per kg. Smaller moves are absorbed.
5. Offer validity: (days) days. An order after that is accepted at the reference rate on the order date,
   with the conversion charge unchanged.

Three choices in that clause decide whether it survives the first revision.

The reference. Pick a rate the buyer can look up without asking you. A published metal exchange price works, and so does a local market rate the trade already quotes, or the buyer's own index. Never use "our supplier's invoice". The buyer cannot check it, and may assume it was padded.

The band. For a gunmetal part, where metal is most of the price, keep it narrow. For a cored iron casting, widen it, or drop the clause and quote firm for a shorter period. Whatever falls inside the band is absorbed, so set it at a level both of you can live with.

Both directions. The clause must cut the price when metal falls. A clause that only ever moves up is a surcharge, and buyers treat it as one.

For example: a Jalandhar gunmetal foundry

Imagine a foundry in Jalandhar pouring gunmetal valve bodies for a valve assembler in Ludhiana. The figures are illustrative, not market rates.

The foundry quoted ₹1,700 a body, "valid 30 days", against a six-release schedule. The order arrived after the validity had passed, at the old price, and the owner accepted it to keep the customer. Copper kept rising. The first three releases were poured at almost no margin, and the owner took a loss on the fourth. When the foundry asked for ₹150 more a body, the purchase officer refused. Nothing in the quotation said the price could move, and the manager would ask why the purchase officer had agreed.

On the next schedule the owner quoted in two parts. Metal came to 2.2 kg a body (2 kg finished plus 10 per cent melting loss) at an assumed ₹600 a kg, or ₹1,320. Conversion was ₹380, firm for the schedule, with a 5 per cent band. When the reference rose to ₹660, the metal portion became ₹1,452 and the body ₹1,832. Later it dipped to ₹585, inside the band, and nothing changed. Both revisions went through without a meeting, because the purchase officer could show the manager the reference and the sum.

When a firm price is the better answer

Not every quote needs a clause. A sample lot or a one-off pattern order should go out firm, with a short validity; a formula on a single lot is paperwork nobody reads. A part where metal is a small share of the price is better quoted firm for a stated quantity and then requoted. And if you cannot explain your clause on the phone in two sentences, rewrite it, because a buyer will not sign what the buyer's own team cannot check.

If you keep a quotation tracker for open quotes, add the assumed metal rate as a column, and checking exposure becomes a glance. Dealers who sell steel itself face a daily version of this problem, covered in quoting steel and sponge-iron buyers.

Raise it before the order, not on the first revised invoice

Talk about metal when the quote goes out. Take the buyer through the two numbers on a call and ask which reference the buyer's company already uses. A clause that was seen and questioned in advance is easier to honour. Found on a revised invoice, the same clause reads as a trick.

Recheck every open quote against today's metal

Pull out every quotation still open or running against a schedule. For each, write down the metal weight and the rate you assumed, then look up today's reference. Any schedule where the gap is already wider than you can absorb needs a call to the buyer before the next release is poured. The rest of the foundry's selling job is on the casting and foundry page. If you want the split and the clause built into the way your foundry quotes through proposal development, tell us what you need.