Today's Pig Iron Market: Mainly Stable, Likely to Observe with a Bullish Bias Tomorrow

Today, the domestic pig iron market has generally exhibited a stable operation, with various market dynamics interweaving to influence the price trends of pig iron.

Macro Environment: Manufacturing Sentiment Declines, Tax Policies Refined

In January, the Purchasing Managers' Index (PMI) for the manufacturing sector stood at 49.3%, a decrease of 0.8 percentage points from the previous month, indicating a decline in the manufacturing sector's prosperity level. When broken down by enterprise size, the PMI for large enterprises was 50.3%, down by 0.5 percentage points from the previous month but still above the threshold, demonstrating certain resilience. In contrast, the PMIs for medium- and small-sized enterprises were 48.7% and 47.4% respectively, with declines of 1.1 and 1.2 percentage points from the previous month, both falling below the threshold and facing relatively greater operational pressures.

Meanwhile, the State Taxation Administration issued the "Announcement on Value-Added Tax Collection and Administration Matters Such as the Threshold Standard," further clarifying issues such as the determination of the threshold standard and the application of tax preferential policies in value-added tax collection and administration, and refining operational requirements. This move helps promote the implementation of the Value-Added Tax Law and its implementing regulations, creating a more standardized and transparent tax environment for the market.

Futures Market: Black Series Futures Plummet, Market Sentiment Dampened

As of the close, all major black series futures contracts posted losses. Iron ore fell by 10 to close at 783; coking coal dropped by 59.5 to close at 1,680.5; coke declined by 34 to close at 1,141.5; rebar fell by 49 to 3,098; and hot-rolled coil decreased by 41 to 3,261. The across-the-board decline in the futures market reflects a pessimistic market sentiment, also exerting certain psychological pressure on the spot pig iron market.

Cost Support: Coking Coal Stable, Iron Ore Adjusts within a Narrow Range

On the cost front, the price of coking coal has remained stable, while iron ore prices have adjusted within a narrow range. In the short term, the cost side of pig iron still enjoys a certain degree of support, providing a foundation for the stability of pig iron prices.

Supply-Demand Dynamics: Rigid Supply Support, Seasonal Demand Weakness

Today, panic selling was triggered in the precious metals and non-ferrous metals markets due to the sudden nomination of a hawkish Federal Reserve candidate, causing a shift in overall market sentiment to pessimism. The black series market was also impacted by this overall atmosphere, with futures prices following the downward trend. However, in terms of the fundamental situation of the pig iron market itself, no substantive changes have occurred.

From the supply side, support from previous orders and low inventory levels at factories have provided rigid support for pig iron supply. Nevertheless, the lack of new orders has limited the upward momentum for pig iron prices, resulting in insufficient market driving forces for price increases.

On the demand side, downstream foundry enterprises are resistant to high-priced resources. Additionally, as the Spring Festival approaches, some enterprises have arranged maintenance plans, and demand has gradually entered a seasonal off-season. In the short term, it is difficult to see significant improvements on the demand side, offering limited support to the pig iron market.

Tomorrow's Outlook: Likely to Observe with a Bullish Bias

Taking into account various factors such as the macro environment, futures market trends, cost support, and supply-demand dynamics, it is expected that the domestic pig iron market will observe with a bullish bias tomorrow. Market participants will closely monitor subsequent policy developments, futures market trends, and changes in downstream demand to adjust their business strategies accordingly.