Chinese steel grade pig iron market in severe depression

Friday, 16 Oct 2009

It is reported that China steelmaking pig iron market still eyes a depression after National Holiday, prices dipping. Amid an air of wait and see both buyers and seller are holding out for a clear trend and sharply reducing the transactions at present.

Current steelmaking pig iron price goes at CNY 2580 per tonne to CNY 2600 per tonne in Shandong at around CNY 2500 per tonne in Yicheng at CNY 2550 per tonne to CNY 2600 per tonne in Hebei at CNY 2500 per tonne to CNY 2650 per tonne in the Northeast and at CNY 2400 per tonne to CNY 2450 per tonne in Yunnan.

As per report, when Iron ore and coke price goes dull, steelmaking pig iron price also tumbles helplessly which is far beyond acceptable level to iron plants. Most of iron producers are struggling to avoid or lower possible losses through curtailing or suspending production. Viewing a limited downward room, existed plants are holding tight and reluctant to sell at the price below cost.

Sluggish demand hasn't changed from downstream industries. Heavy social stocks and high output capacity delayed a sign of recovery for steel market. Traders hesitate to place orders for pig iron with an expectation of another fall in the near future. Mills in restocking also implement low price and low quantity policy denting demand harder in the market.

Most insiders predicted pig iron market would hardly escape from depression in the short term when steel market keeps going down. But with the support of cost, the decrease is foreseeable. When price will bottom out and rebound depends on steel movement.

(Sourced from MySteel.net)
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