Castings and Forgings Lying in the Yard for Months: How Much Cash Is That? (₹)

How much cash is in the castings and forgings lying in my yard? Multiply tonnes by the ₹/kg already built into them. In the assumed 130-tonne yard below that is ₹1.46 crore, costing ₹1.28 lakh a month at an assumed 10.5% cash-credit rate. Against an assumed ₹30/kg scrap floor (delivered scrap: ₹37.9/kg, SMM, 1 Sep 2026), ₹1.07 crore is at risk.

By the Mama Editorial Team. Last checked: 17 Oct 2026, against the RBI MPC resolution of 7 October 2026, SMM's Indian scrap reports of 6 August and 1 September 2026, BigMint's pig iron report of 3 July 2026, the ICAI Expert Advisory Committee opinion quoting AS 2, the CGST Act and CBIC Notification 25/2024-Central Tax. Every ₹ figure in the worked example is a labelled assumption.

Key takeaways

• Yard stock is cash at cost, not scrap at weight. A tonne of machined-ready castings carries metal, melting, moulding, fettling and freight already paid for.
• Sort the yard by why each lot is there. Schedules the OEM did not pull, rejected lots waiting for a decision, and castings waiting for your own machining need three different owners.
• Age it by part, not by heap. A lot that has sat for 300 days is a different decision from one that has sat for 30.
• The scrap floor tells you how much is at risk. Delivered ferrous scrap was ₹37,900 a tonne at Mandi Gobindgarh on 1 September 2026, per SMM. Anything you built in above that floor is what you lose if the lot never ships.
• Give every lot a decision date. Interest is the slow cost; a write-down you put off is the big one.
• Cameras show which heaps have not moved. Part number, heat number and book value come from your stores ledger and ERP.

Why the yard is not the same as WIP

Work-in-progress between operations moves every day, even if slowly; we covered that in parts waiting between operations in a CNC shop. The yard is different. Material lands there when the flow has stopped: nobody has scheduled the next step.

In a foundry or forge, three kinds of lots end up outside under a tarpaulin or stacked on pallets near the boundary wall:

Schedules the OEM did not pull. You made to the monthly schedule; the customer revised it or a model changed. The parts are good and waiting.

Rejected lots awaiting a decision. A lot failed inspection, at your end or the customer's. It sits until someone decides: rework, sort, request a deviation, or remelt. Often nobody owns that decision.

Machining backlog. Rough castings or forgings waiting for your own machine shop, or for a job worker. The foundry ran faster than machining, and the difference went to the yard.

A single "yard stock" number hides three different problems: planning, quality and capacity.

The method: tonnes × ₹/kg × months × rate

1. List every lot. Part number, customer, heat, tonnes, date it arrived in the yard.
2. Tag the reason. Not pulled, rejected, or waiting for machining. Anything else goes under "unknown", which gets attention first.
3. Put a ₹/kg on each lot. The cost built in to that stage (metal, melting, moulding or die, fettling, heat treatment, freight), not selling price.
4. Count the months. Days in the yard ÷ 30.
5. Price the money. Use the rate on your cash-credit limit from your sanction letter.
6. Write the scrap floor next to each lot. What a buyer pays at your gate today, or the metal's worth as furnace returns.

Book value minus scrap floor is the amount at risk. Book value × rate × months is the interest you have already carried.

Worked example: an assumed 130-tonne yard

Assumptions (illustrative, not benchmarks). A grey-iron foundry with a small forging line, of the kind found around Rajkot, Kolhapur, Coimbatore or Ludhiana. Four lots sit in the yard. Tonnes, ₹/kg built in and days in the yard are all assumed. The cash-credit rate is assumed at 10.5% a year.

Going forward, the whole yard costs 146.4 × 10.5% ÷ 12 = ₹1.28 lakh a month, or about ₹15.4 lakh a year.

The rate behind the 10.5% assumption: on 7 October 2026 the RBI raised the repo rate by 25 basis points to 5.50% (RBI MPC resolution, 7 Oct 2026). Your own all-in cash-credit rate is in your sanction letter; use it in place of the 10.5% assumption.

The scrap floor: what the metal is worth if the lot never ships

The scrap floor is the least the yard is worth. Two public price points, both dated:

• Ferrous scrap, delivered to mills. At Mandi Gobindgarh, HMS 1&2 (80:20) was ₹33,200 a tonne on 6 August 2026 (SMM, 6 Aug 2026) and ₹37,900 a tonne delivered Mandi on 1 September 2026 (SMM, 1 Sep 2026).
• Pig iron. Steel-grade pig iron at Durgapur was ₹37,861 a tonne in June 2026, down from ₹38,348 in May (BigMint, 3 Jul 2026). The same report gives no foundry-grade price.

These are delivered or traded prices. A dealer collecting from your gate offers less, after freight, sorting and margin. Remelting your own rejects saves charge material but costs a second melt.

Assume a floor of ₹30 per kg for every lot in the example, about 21% below the 1 September Mandi price. Replace it with a real quote from your own buyer.

About three-quarters of the yard's value is conversion, not metal. That share is what you lose when a lot finally goes to scrap. The interest line, ₹4.63 lakh so far, is small next to it.

Ageing by part: where to look first

Sort the same lots into age bands. The bands below match the 0–90, 91–180 and over-180-day split in the stock ageing calculator, with the first band split in two because castings in a yard age faster than parts in a closed store.

Lot D, a discontinued variant 300 days old with no written order, is unlikely to sell at book value. Lot B is the most urgent: deciding on a rejected lot costs one meeting, and every month without it adds interest and rust.

Give every lot an owner and a decision date

• Not pulled (Lot A): the sales head asks the customer for a revised call-off in writing, and checks the purchase order or scheduling agreement for any clause covering material built against a cancelled schedule.
• Rejected (Lot B): the quality head decides within an agreed number of days between sorting, rework, deviation request or remelt.
• Machining backlog (Lot C): the plant head compares machine-shop capacity with the casting plan. A yard that keeps refilling means the foundry is planned faster than machining.
• Discontinued (Lot D): the owner decides between a final offer to the customer, sale to another buyer, or scrap.

For the decision itself, the money already spent is gone. Compare what you can get now (the scrap floor, or a sale) with what you expect later, less the interest and handling until then.

What the books and the law say when a lot is finally written down

Facts to take to your CA, not advice.

Valuation. Under AS 2, inventory is carried at the lower of cost and net realisable value, defined as "the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale" (ICAI Expert Advisory Committee opinion quoting AS 2). A lot whose realistic outlet is scrap may already need writing down to near the scrap floor.

Input tax credit. Section 17(5)(h) of the CGST Act blocks input tax credit on "goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples" (CGST Act, CBIC). Writing a lot off, rather than selling it, can mean reversing credit already taken.

Selling the lot as scrap. Since 10 October 2024, a registered person receiving metal scrap under Chapters 72 to 81 of the Customs Tariff from another registered person must deduct GST TDS (Notification 25/2024-Central Tax, 9 Oct 2024). Section 51 of the CGST Act sets the central-tax deduction at one per cent of the payment where the value of supply under a contract exceeds ₹2.5 lakh, and its proviso excludes cases where the supplier and place of supply are in a different state from the buyer's registration, per the same CBIC copy of the Act. Lot B alone, at ₹5.4 lakh of scrap, crosses that line, so expect part of the buyer's payment to arrive as a credit in your electronic cash ledger instead of in your bank.

What cameras can and cannot tell you here

What cameras can show: - Which heaps have not moved. A pallet stack that stays put in a marked bay for 60 days is visible whatever the ledger says. - Exposure. Uncovered stacks in rain, tarpaulins blown off, standing water around a bay. - Movement out of the gate. Loads leaving the yard and the scrap-dealer truck, linked to weighbridge records; see the scrap yard CCTV specification.

What cameras cannot show: - Part number, heat number or customer. From a pole, one grey stack of housings looks like another. - Book value. A camera sees tonnes at best, never ₹/kg built in. - Why a lot is waiting. "Customer has not called off" and "quality has not decided" look the same on video.

The useful pairing is dwell from the camera, value from the books. Where a bay has not moved and the ledger shows the lot as over 90 days, decide this week. For what else cameras do in a melting or machining shop, see cameras for foundries and engineering units; for the plant-wide count across WIP, aged stock and packed goods, see how much working capital is stuck on your factory floor.

Where Mama fits

Mama reads the video from a factory's existing cameras, or from cameras added where coverage is missing, and each morning sends the owner a short, plain-language note on where hours and money leaked the day before. For a yard, that means which bays have not moved and for how many days, and whether the yard grew or shrank. It reports bays, stacks and flow, not individual people; the ₹ value still comes from your own ledger. To see whether your current cameras cover the yard, leave an email or phone in the form below, and Mama will get back to you with a camera plan.

FAQ

How do I calculate the cash tied up in castings lying in my yard? Multiply tonnes by the ₹/kg already built in (metal plus every process and freight cost to that stage). For the monthly cost, multiply that book value by your cash-credit rate and divide by 12.

What scrap price should I use as the floor? A written quote from your own scrap buyer, or the value of the metal as returns in your furnace. For a public reference, SMM reported delivered HMS 1&2 (80:20) at ₹37,900 a tonne at Mandi Gobindgarh on 1 September 2026; a gate price will be lower.

When should a rejected lot be remelted instead of held? When nobody can name a date for the rework or deviation decision. Set a fixed decision window for every rejected lot and treat the scrap floor as the fallback value from day one.

Does selling yard castings as scrap attract GST TDS? If both sides are GST-registered, yes: since 10 October 2024 the buyer of metal scrap under Chapters 72 to 81 deducts tax under section 51 of the CGST Act, per Notification 25/2024-Central Tax. Check the exact treatment with your CA.

Can a camera tell me what each stack in the yard is worth? No. A camera shows which stacks have not moved and for how long. Part number, heat number and book value come from your stores ledger or ERP.