{"id":8056,"date":"2026-10-20T02:04:31","date_gmt":"2026-10-20T02:04:31","guid":{"rendered":"https:\/\/chinametalfoundry.com\/?p=8056"},"modified":"2026-10-20T02:04:31","modified_gmt":"2026-10-20T02:04:31","slug":"casting-payment-terms","status":"publish","type":"post","link":"https:\/\/chinametalfoundry.com\/es\/blog\/casting-payment-terms\/","title":{"rendered":"Casting Payment Terms: Deposits, Letters of Credit and Milestone Billing"},"content":{"rendered":"
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Most buyers treat casting payment terms<\/strong> as a finance-department formality to be settled after the technical work is done. In practice those terms decide who finances ten weeks of molten metal, who absorbs the loss when a batch fails at your machining line, and how much leverage you still hold after the wire has gone out.<\/p>\n<\/div>\n

This guide breaks casting payment terms into cash rather than jargon. We work one real-size order all the way through \u2014 2,000 ductile iron pump housings with new tooling \u2014 and price each structure on the same basis: cash tied up, bank fees, and what happens when something goes wrong. Where a number depends on a standard, we name the standard. Industry practice references come from the Sociedad Estadounidense de Fundici\u00f3n<\/a>, the North American Die Casting Association<\/a> and the ICC rules that govern documentary credits. If you are still at the quotation stage, read what a foundry needs for an accurate quote<\/a> first \u2014 the schedule you are offered usually follows directly from how complete that package was.<\/p>\n

\"Casting
A raw casting and a machined one look like one part to a purchasing system. They sit at opposite ends of the cash cycle.<\/figcaption><\/figure>\n

Why Casting Payment Terms Are a Working-Capital Contract<\/h2>\n

A machine shop buys bar stock and cuts it. A foundry buys pig iron, scrap, ferroalloys, sand and binders, melts them, pours them, then waits weeks before the shape is cool enough to inspect. Most of the cost of a casting exists before there is anything to ship<\/strong>, and almost none of it can be resold \u2014 a pattern, a core box and a poured casting are all single-customer assets. That is the fact that casting payment terms are built to manage.<\/p>\n

Take the order we use throughout this article. Two thousand pump housings, 18.0 kg net weight each<\/strong>, poured at a 62% yield so 29.0 kg of iron leaves the furnace for every good part \u2014 the alloy choice behind that number is unpacked in gray iron vs ductile iron<\/a>. Unit price $24.50 gives $49,000 of goods. New tooling \u2014 a pattern plate and two core boxes \u2014 adds $12,000. Total purchase order: $61,000<\/strong>. Here is where that money physically has to go before a crate leaves the dock.<\/p>\n\n\n\n\n\n\n\n\n\n
Cash out before shipment<\/th>\nAmount<\/th>\nShare of PO<\/th>\nResale value if you walk away<\/th>\n<\/tr>\n<\/thead>\n
Tooling (pattern, core boxes)<\/td>\n$12,000<\/td>\n19.7%<\/td>\nNear zero \u2014 customer-specific<\/td>\n<\/tr>\n
Metal, sand, binders, melt energy<\/td>\n$22,050<\/td>\n36.1%<\/td>\nScrap value only<\/td>\n<\/tr>\n
Moulding, melting, shakeout labour and overhead<\/td>\n$14,700<\/td>\n24.1%<\/td>\nNone<\/td>\n<\/tr>\n
Finishing, inspection, packing<\/td>\n$2,450<\/td>\n4.0%<\/td>\nNone<\/td>\n<\/tr>\n
Total sunk before you receive anything<\/strong><\/td>\n$51,200<\/strong><\/td>\n83.9%<\/strong><\/td>\n\u2014<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

That single figure \u2014 84% of the order value committed before delivery<\/strong> \u2014 explains nearly every clause you will be asked to sign. It is also why the deposit conversation inside casting payment terms is not a negotiation about trust. It is a negotiation about who carries roughly $51,000 of illiquid, customer-specific inventory for ten weeks. The same arithmetic drives the clauses covered in how casting tooling cost is amortised<\/a>, and it is the reason a supplier pushes back when you ask for volume without a schedule, as the MOQ arithmetic<\/a> shows from the other side. For the per-piece view of the same $24.50, see \u00bfQu\u00e9 factores influyen en el costo de fundici\u00f3n?<\/a>.<\/p>\n