The transaction prices of L8 and L10 steelmaking pig iron in northern China's Hebei province stood at Yuan 2,460-2,510 ($400-408) /mt on March 3, down 1.6% from Yuan 2,500-2,550/mt on January 28, with the widely expected post-holiday rebound in the steel market failing to happen, market sources said Tuesday.
The China market was closed for the Lunar New Year holiday over January 31- February 6.
"The market is chaotic, with prices everywhere, and the lowest dealing price was reported at Yuan 2,400/mt, as some sellers went into desperate sales when domestic steel prices slipped instead of rebounding as expected after the holiday," said an official from a Hebei steel mill.
Market sources, nevertheless, agreed that prices at Yuan 2,400/mt or Yuan 2,600/mt were not repeatable and reflective of the current market.
"Too low prices may be due to panic selling amid tight cash flow while too high prices may include premiums for better quality and other contract terms and conditions," an official from a second local steel mill said.
Market participants were divided as to the near-term outlook for the pig iron market. Some expect domestic Chinese steel prices including pig iron to bottom out sometime later in March on anticipated better domestic demand in the spring.
Others, however, remain pessimistic, pointing to high steel inventories at Chinese plants, persistent oversupply and weak iron ore prices.
Official data on China's pig iron production over January-February will only be released by the country's National Bureau of Statistics on March 13. In 2013, China's production of pig iron grew 6.2% year on year to 708.9 million mt, matching the pace of growth in crude steel output, according to NBS data.
