Domestic Foundry Pig Iron Market: Stable and Wait-and-See, with Supply-Demand Dilemma to Be Resolved

Today, the domestic foundry pig iron market mainly maintained a stable and wait-and-see operation.

Macroeconomic Aspect

The State Council issued the "Solid Waste Comprehensive Treatment Action Plan," promoting the integrated construction of mining and beneficiation for heavy non-ferrous metals. It encourages the nearby backfilling of tailings and, in principle, will no longer approve the construction of beneficiation projects without self-built mines and supporting tailings utilization and disposal facilities. By 2030, the annual comprehensive utilization volume of major solid wastes is expected to reach 4.5 billion tons, and the annual recycling volume of major renewable resources is projected to reach 510 million tons. The Ministry of Commerce issued a document stating that, in accordance with relevant laws and regulations such as the "Export Control Law of the People's Republic of China," and to safeguard national security and interests and fulfill international obligations such as non-proliferation, it has decided to strengthen export controls on dual-use items to Japan. It prohibits the export of all dual-use items to Japanese military users, for military purposes, and to any other end users that contribute to enhancing Japan's military capabilities.

Futures Aspect

As of the close of trading, the major varieties in the black series experienced oscillating adjustments. Iron ore rose by 5.5, closing at 801; coke fell by 12, closing at 1,655; coking coal fell by 1, closing at 1,096; rebar fell by 2, closing at 3,111; and hot-rolled coil rose by 6, closing at 3,263.

Cost Aspect

The decline in coke prices has weakened support, while the oscillating iron ore prices have somewhat offset the impact on costs. In the short term, there has been little change in the cost side of foundry pig iron.

Supply and Demand Aspect

The resumption of blast furnace operations has gradually boosted supply volumes, but short-term supply tightness has resulted from inspections at some ironworks. Most ironworks have low inventory levels, and the current supply pressure is not significant. On the demand side, it is still the traditional off-season. Downstream foundry enterprises have insufficient orders, and the cost-effectiveness advantage of foundry pig iron over scrap steel is not prominent. Enterprises are mostly purchasing on a need-basis and lack the motivation to replenish inventories, resulting in sluggish market transactions. Before there are clear signs of market improvement, the price of foundry pig iron is caught in a dilemma between rises and falls.