Looking back at the national pig iron market in October, the price showed a trend of rising first and then falling.
After the National Day, the COVID-19 broke out at many points; the prices of steel and scrap steel continued to decline; and the downstream demand for superimposed pig iron was lower than expected. In November, the northern region will enter the heating season one after another, and the seasonal off-season of the market will also come.
1.Pig iron prices rose first and then fell in October, and the focus of transactions moved down.
At the beginning of October, the first round of coke increase of 100 yuan/ton was fully implemented, the cost of pig iron increased again, the price trend of superimposed steel and scrap steel was strong, and after the downstream foundry companies replenished their warehouses before the festival, pig iron companies mainly placed more production orders, and most of them were in stock. Merchants are more willing to increase in a low or negative inventory state. Later, transportation in some areas was restricted with the tightening of epidemic prevention and control in various places. Black-based futures, steel, scrap steel, etc. tended to be lower and adjusted. In addition, the Fed’s interest rate hike expectations were too strong, and merchants were not optimistic. In order to promote shipments, some traders had low prices. Due to the phenomenon of selling goods in price, the quotations of pig iron enterprises have also been lowered one after another.
As of October 31, the steelmaking pig iron L8-L10 in Linyi was lowered by 130 yuan/ton month-on-month to 3,250 yuan/ton, and Linfen was lowered by 160 yuan/ton month-on-month to 3,150 yuan/ton; casting pig iron Z18 Linyi was lowered by 100 yuan month-on-month. Yuan/ton, reported at 3,500 yuan/ton, Linfen month-on-month decreased by 10 yuan/ton to 3,660 yuan/ton; ductile iron Q10 Linyi month-on-month decreased by 70 yuan/ton to 3,780 yuan/ton, Linfen month-on-month decreased by 20 yuan/ton Ton, reported 3730 yuan/ton.
2. The utilization rate of blast furnace capacity of pig iron enterprises in the country dropped slightly.
In mid-to-early October, pig iron enterprises placed many pre-production orders, and most manufacturers’ inventories were at a low level. Pig iron enterprises were still enthusiastic about starting construction, and some blast furnaces resumed production. Later, due to the epidemic situation in Shanxi, Liaoning, and other places, the superimposed pig iron price continued to decline, the profit of pig iron enterprises narrowed or was in a state of loss, and the enthusiasm for production decreased. The utilization rate of the blast furnace capacity of enterprises was 59.56%, down 4.30% from the previous week and 7.78% from the previous month. The actual weekly output of pig iron was about 265,800 tons, a decrease of 19,200 tons week-on-week and 34,700 tons month-on-month. The factory inventory was 467,500 tons, an increase of 22,700 tons week-on-week and 51,500 tons month-on-month. According to Mysteel statistics, some blast furnaces will stop production and resume production after November, but they will focus on pig iron demand and profit, so the capacity utilization rate of blast furnaces will fluctuate slightly.
3. Global pig iron production rises slightly.
Construction sites in northern China are facing the status quo of shutdowns one after another, and the steel demand has entered the off-season in the traditional sense. In addition, the fundamentals of supply and demand in the steel market are unlikely to improve significantly in the short term, and the center of gravity of steel prices is still expected to continue to move downward in November. Comprehensive consideration, the scrap usage of various steel mills continues to remain low, the market merchants are less confident and pessimistic, and the scrap trading volume has been greatly reduced. Therefore, the scrap may continue to fluctuate and weaken.
As the price of pig iron continues to decline, most pig iron enterprises are in a state of loss in profits, and their enthusiasm for starting construction has decreased. Some blast furnaces have added new shutdowns for maintenance, and some enterprises have also postponed the resumption of production, and the supply of pig iron has decreased. However, the downstream demand for pig iron is sluggish, and the purchase is affected by the mentality of buying up and not buying down, downstream foundry companies only purchase a small number of rigid needs, pig iron companies are blocked from shipping, and inventories continue to accumulate, and the situation of strong supply and weak demand in the pig iron market is unlikely to improve in the short term.
Looking forward to November, the pig iron market is still facing the influence of negative factors such as the downturn of the international economy and weak domestic economic growth. Superimposed raw material costs and downstream demand are both weak. Without the support of favorable factors, it is expected that the domestic pig iron market price will be shown weak performance in November.
The cast iron market continues to decline and the market is unstable, which further stimulates Dinsen Impex Corp to face challenges in this field, seek the development prospects of Chinese foundry and Chinese pipelines in an unstable environment, find new opportunities in the foundry field, and maintain balance and stability with customers of cast iron exports.
Post time: Nov-08-2022