While current traded prices for L8 and L10 steelmaking pig iron in northern China's Hebei province have slipped since March 3, the market is likely to see higher traded values in the coming weeks with some offers seen rising by as much as Yuan 100/mt over the past three days, market sources said Tuesday.
Traded prices for L8 and L10 steelmaking pig iron in Hebei slipped to Yuan 2,420-2,470 ($392-400)/mt Tuesday, down 1.6% or Yuan 40/mt, from Yuan 2,460-2,510/mt on March 3, market sources said.
Domestic demand was sluggish in March, as Chinese steel mills, with record high finished steel inventories, had kept their steel output relatively low, sources added.
The China Iron & Steel Association estimated the country's daily crude steel output during March 11-20 fell 0.04% from the previous 10 days to 2.096 million mt. The Chinese steel mills are unlikely to lift steel output substantially in the future as they still have over 17 million mt of finished steel inventory at their works, it said.
Besides, price declines in imported iron ore for most of March dampened China's steelmaking pig iron prices as well, a Hebei-based steel analyst said.
Steelmaking pig iron, being a middle product in steel production, has a closer correlation in price with iron ore than with finished steel products, he added.
As such, the recent recovery in imported iron ore prices -- especially the $4/dmt rebound seen Monday -- led to higher offers for steelmaking pig iron in Hebei, market sources noted.
A procurement official from a private-owned steel mill said offers were seen at as high as Yuan 2,600/mt for the L8 and L10 grades of steelmaking pig iron Tuesday, up almost Yuan 100/mt over the last two-three days.
The mill usually uses iron ore to produce steel, but it often purchases steelmaking pig iron if imported iron ore prices are too high. The last time it bought steelmaking pig iron was in December, he added.
China's pig iron production volume, including steelmaking and die-casting over January-February remained almost unchanged from last year, at 116.73 million mt, up 0.2% year on year, latest data from the NBS said.
