Sluggish demand drags pig iron price down in Hebei province

According to market sources, the prices of L8 and L10 pig iron slipped heavily in the Chinese Hebei province

BEIJING (Scrap Monster): According to market sources, the prices of L8 and L10 pig iron slipped heavily in the Chinese Hebei province, over the previous month. However, the prices are likely to stage a rebound in the coming weeks, as offer prices have started showing positive signs.

The L8 and L10 pig iron traded in the range Yuan 2,420-2,470 on Tusday. This is 1.6% down when compared with the prices a month ago. The L8 and L10 trded price had averaged at Yuan 2,460-2,510/mt on March 3rd this year. The prices have seen a decline of Yuan 40 per mt over the month.

The fall in prices of the steel making component was mainly attributed to the lower production levels by domestic steel mills in the province. The sluggish domestic demand continued to keep the finished inventory levels at higher levels in most steel making facilities. The price decline in imported iron ore also led to the fall in pig iron prices.

The steel output is expected to remain subdued in the coming weeks, as the reported finished steel inventory levels now stand at 17 million mt. According to latest data released by the China Iron and Steel Association (CISA), the country’s daily crude steel output during the period from 11^th to 20^th of March declined by 0.04% from the output during the previous ten days period.

However, the offers have perked up by Yuan 100 per mt on Tuesday, which is considered as a clear indication of rebound in prices going forward.The pig iron L8 and L10 grade offers quoted as high as Yuan 2,600 per mt, industry sources said.