China Pig Iron Market Update: Prices Remain Stable Amid Policy Support and Tariff Concerns

Market Overview

Today, the domestic pig iron market in China remained generally stable, with minor price adjustments observed in some regions. Overall, cost support remains strong, but downstream demand is relatively weak, leading to a cautious and wait-and-see sentiment across the market.

Macroeconomic Factors

As of now, the total issuance of local government bonds in China has exceeded 8.5 trillion yuan this year, including 3.68 trillion yuan in new special bonds and 0.64 trillion yuan in new general bonds.
In addition, the issuance of “special” new special bonds has far exceeded last year’s quota of 800 billion yuan, reflecting that fiscal policy continues to play a proactive role, providing solid support for infrastructure investment and steel demand.

However, sentiment was shaken by negative news on October 10, when a tariff announcement triggered renewed global risk aversion. According to reports, starting from November 1, the United States will impose an additional 100% tariff on Chinese goods, on top of the existing 30% rate—raising the total tariff to as high as 130%.
If implemented, this measure would put significant pressure on China’s steel exports and downstream industries, and could dampen short-term market confidence.

Cost Factors

Coke prices remained stable as coking plants maintained low inventories and smooth shipments, while steel mills continued to purchase based on actual needs. Meanwhile, iron ore prices stayed at high levels, keeping strong cost-side support for pig iron prices. In the short term, costs are unlikely to decline significantly, maintaining upward pressure on the market.

Supply and Demand

On the supply side, most major pig iron producers are scheduling production based on existing orders, and inventory levels remain low.
On the demand side, foundries showed weak purchasing interest, with limited new orders being signed. The uncertainty surrounding the tariff dispute has led to a cautious market atmosphere, and overall trading activity has declined.

Market Outlook

In summary, the Chinese pig iron market is expected to remain stable and cautious in the near term. The market trend will largely depend on the pace of downstream demand recovery and the implementation of macroeconomic policies.
Given the uncertainty in global trade relations, market participants are advised to closely monitor policy changes and cost fluctuations, maintain prudent purchasing strategies, and manage inventory risks carefully.