Pig Iron Output Plummeted Year-on-Year in October
Data from the National Bureau of Statistics: Domestic pig iron output reached 65.55 million tons in October, a year-on-year decrease of 7.9%. From January to October this year, cumulative pig iron output stood at 711.37 million tons, down 1.8% year-on-year. Domestic coke output in October was 41.90 million tons, a year-on-year increase of 1.5%; the cumulative output from January to October reached 419.05 million tons, rising 3.3% year-on-year.
From January to September this year, pig iron output was 645.86 million tons, a year-on-year decrease of 1.1%; coke output was 377.16 million tons, a year-on-year increase of 3.5%. The scissors gap between the year-on-year growth rates of domestic coke and pig iron output in October was 9.4%; for the January-October period, the scissors gap stood at 5.1%, compared with 4.6% in January-September. Although the year-on-year growth rate of coke output slowed in October this year, pig iron output dropped by a larger margin, further widening the scissors gap between the two growth rates.
Why did domestic pig iron output decline sharply in October?
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Declining Growth in Fixed Asset Investment
From January to October 2025, national fixed asset investment (excluding rural households) reached 40.8914 trillion yuan, a year-on-year decrease of 1.7%. Among them, fixed asset investment in October fell by about 15% year-on-year, with the decline further expanding from the previous month. The downward trend in fixed asset investment growth led to a significant year-on-year drop in domestic steel demand. In contrast, cement has a stronger correlation with infrastructure than steel. National cement output in October was 147.75 million tons, a decrease of 15.8%; cumulative cement output from January to October was 1.39985 billion tons, a year-on-year decrease of 6.7%—a decline far exceeding that of pig iron.
Proactive Production Cuts in the Steel Industry
The steel industry has achieved remarkable results in curbing internal competition by proactively reducing steel output. Despite the sharp year-on-year drop in pig iron output, the social inventory of steel increased year-on-year. According to data from the China Iron and Steel Association (CISA), in the first ten days of November, the steel inventory of key domestic steel enterprises was 15.49 million tons, an increase of 3.12 million tons (25.3%) from the beginning of the year and 1.83 million tons (13.4%) from the same period last year. The social inventory of five major steel products in 21 cities was 6.93 million tons in the first ten days of November, a decrease of 0.36 million tons (4.9%) from the start of the year but a drop of 0.99 million tons (12.5%) from the same period last year. The total domestic steel inventory in the first ten days of November increased by 2.75 million tons from the beginning of the year and 0.84 million tons from the same period last year.
Next, we discuss the reasons for the firm prices of coking coal and coke. In October this year, the output of raw coal from industrial enterprises above designated size was 410 million tons, a year-on-year decrease of 2.3%; from January to October, the cumulative output was 3.97 billion tons, a year-on-year increase of 1.5%. China’s imports of coking coal from January to September 2025 were 83.5311 million tons, a year-on-year decrease of 6.05%, with a year-on-year increase of 5.5% in September. The year-on-year growth rate of coke output (an intermediate product in the ferrous metals sector) was much higher than that of pig iron and coking coal, creating a tight supply and price increase of coking coal, which in turn drove up coke prices. This stimulated the enthusiasm for hoarding coking coal and coke along the industrial chain, realizing a chain transmission of prices.
It is expected that in the first half of next year, a year-on-year decrease of 5% in domestic pig iron output may become the new normal (the year-on-year decline in October was 7.9%), which may be much higher than the decline in domestic coal output (a 2.3% year-on-year drop in October). Baoshan Iron & Steel Co., Ltd. recently stated that its production capacity target has been adjusted from “80-100 million tons” to “over 80 million tons” (a potential decrease of 0 to 20%), shifting its focus from pure scale expansion to tapping into the value of existing assets through synergy.
