China's Domestic Pig Iron Market Remains Stable Amidst Mixed Influences

Macroeconomic Context

Preliminary calculations indicate that China's gross domestic product (GDP) for the full year 2025 reached 140.1879 trillion yuan, representing a year-on-year growth of 5% at constant prices. By quarter: Q1 grew by 5.4%, Q2 by 5.2%, Q3 by 4.8%, and Q4 by 4.5%. Sequentially, GDP increased by 1.2% in the fourth quarter.
The Central Meteorological Office continued to issue a yellow alert for snowstorms at 10:00 on January 19, forecasting heavy snow from 14:00 on January 19 to 14:00 on January 20 in parts of central and southern Henan, central and northern Anhui, Hubei, northern Hunan, and northeastern Chongqing. Specific regions, including southern Henan, northwestern Anhui, northern and southwestern Hubei, and northwestern Hunan, are expected to experience blizzards (10–16 mm). Accumulated snow depth in affected areas may reach 4–8 cm, with localized areas exceeding 10 cm.

Futures Market

At the close, most main contracts in the black commodities sector declined. Iron ore fell by 21 points to 794; coking coal dropped by 9.5 points to 1,174.5. Rebar decreased by 33 points to 3,140, and hot-rolled coil declined by 25 points to 3,299.

Cost Factors

Currently, coke prices remain stable. However, iron ore faces increased supply pressure due to higher port arrivals, coupled with weakening molten iron output and contracting demand expectations, leading to downward pressure on ore prices. In the short term, cost-side support for pig iron has weakened.

Supply and Demand Dynamics

On the supply side, most iron plants maintain relatively low inventory levels, providing a floor for pig iron prices. However, demand remains sluggish, with downstream procurement generally slowing down and mostly aligning with immediate needs. This has resulted in subdued overall market transactions, lacking substantial momentum for price increases. Additionally, recent fluctuations in the black commodities futures market have further heightened cautious sentiment, prompting traders to adopt a more prudent approach. Mainstream offers have remained largely stable.

Overall Outlook:

Considering the above factors, the pig iron market is expected to maintain stability with a wait-and-see attitude in the coming days.