Market Data

Why Castings Cost More Than the Steel They're Made From, Foundry PPI at 296.21

The producer price index for cast metal parts captures foundry labor, energy and scrap conversion costs that raw-steel indexes miss. Here is what is driving it.

The PPI for iron and steel castings stands at 296.21 as of May 2026, per the Bureau of Labor Statistics, with the trend rising and the index up about 4.4% from a year ago. The reading is where it is because foundries pass through more than raw metal: melting energy, molding labor, and scrap-to-casting conversion costs are baked into the index, so it moves independently of upstream steel prices and reflects the finished-part economics manufacturers actually pay, now roughly 3.0 times the 1982 base.

A conversion-cost index wearing a metals label

A casting's price decomposes into metal and everything done to it. The metal, mostly ferrous scrap charged into an induction or cupola furnace, is often less than half the invoice. The rest is conversion: the electricity to melt it, the sand and binder systems that form the mold, the pattern and coremaking work, the molding and pouring labor, then shakeout, fettling, grinding, heat treatment, and inspection. Each of those steps has its own cost curve, dominated by energy and skilled labor rather than scrap. That is why this index can keep moving after raw-steel benchmarks flatten, or hold steady while they gyrate: it tracks the economics of a foundry, not a mill. Buyers who benchmark casting quotes against a raw-steel index are measuring the smaller half of the price.

What is pushing the number now

Three pressures explain most of the index's movement. Scrap sets the floor and swings with the broader ferrous complex. Energy is the quiet giant, melting iron takes on the order of 500 kilowatt-hours per ton, so industrial power rates flow into the index with almost no lag. And labor is the structural story: the U.S. foundry base has consolidated for decades, molders and melters are hard to hire, and surviving foundries carry pricing power that a fragmented industry never had. With the index currently climbing and up about 4.4% from a year ago, the near-term move says less about any single input than about foundries' ability to pass all three through. Capacity, not cost, is the variable to watch.

PPI, iron and steel castings (1982=100), May 2026: 296.21. The archived window runs from 283.24 in Jun 2025 to 296.21 in May 2026; the current reading sits 100% of the way up that range.

It tracks the economics of a foundry, not a mill, buyers who benchmark castings against raw steel are measuring the smaller half of the price.

What the index move costs a casting buyer

Translate the reading into a purchasing line. A machine builder spending $120,000 a year on iron and steel castings, housings, brackets, gearbox cases, has watched the index go up about 4.4% from a year ago (+4.4%). If supplier prices tracked it, that repriced the line by roughly $5,298 over the past year, in the direction of the index. The practical use of the series is exactly this arithmetic: it is the neutral yardstick for whether a foundry's requested increase reflects the market or pads it, and the published benchmark to write into any surcharge clause.

Run the casting lot cost calculator to break a foundry quote into metal, melt energy, molding, and finishing, and see which line the index is moving. Cost a casting lot

Published 2026-07-13.