Bearing steel price may remain at the bottom in November
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Nov 16,2015
Overview
From January to September, the output of crude steel decreased by 8.56% year on year, the output of bearing steel decreased by 10.46% year on year, and the exports fell down by 13.59% year on year. Reviewing the bearing steel market in October, the price of GCr15 remained stable in early October, but became slightly loose in some areas at the end of the month. Up to now, the price of low-grade continuous casting non-annealed steel was 2400 yuan/ton; medium-grade was 2700 yuan/ton; high-end was 4000 yuan/ton; forgings was 5500 yuan/ton. Market demand was gradually weakening, selling pressure keeps growing, and homogeneous competition remains intense, all of which results continuous falling in price.
I. Bearing Steel Markets
1. Output from January to September
(i) The YOY output of crude steel and bearing steel both decreased
According to the statistics of Special Steel Association, from January to September 2015, the output of bearing crude steel reported by domestic major steel companies was 2.045 million tons, decreased by 10.46% over the same period last year; in the same period, the steel output of domestic major steel companies was 1.7528 million tons, decreased by 9.46% over the same period last year, but the growth slowed. For details, see Figure 1:
(ii) The majority of steel mills reported YoY decrease in the output of bearing steel
Seen from Table 1 that the top three for bearing steel output from January to September 2015 are still Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneng Steel. (for Sha Steel, only the yield of Huai Steel is counted). Among these 23 companies, the crude bearing steel ouput of 3 companies rose while 18 fell, 2 out of production.
2. Export: export fell slightly YoY in September
Domestic bearing steel export was 118,180 tons in September, decreased by 9.49% YoY and 12.01% MoM. Total export volume in the first nine months was 92,099 tons, representing a reduction of 13.59% over the same period last year. In September, Xingcheng Special Steel reported the largest export volume of bearing steel, 9,755 tons, accounting for the vast majority of bearing steel exports.
It is understood that many steel mills have set their sights on the international market due to poor internal demand, and some of them even give a 200-300 yuan/ton preferential to encourage export.
3. Mainstream price policy in October: The majority of steel mills remained weak on a stable basis
Market demand remained sluggish in October, and the turnover was relatively light. Most steel mills kept the price being stably weak, while some cut the price down by 20-50 yuan/ton due to the impact of declining orders. For now, most steel mills are at loss in varying degrees, but the price is unlikely to fall further in November.
II. Relevant Markets
1. Raw materials market
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Imported ore prices fell down significantly in October, especially the port stocks, and closed at 48.95 dollar per dry metric ton at the end of the month; Carbon steel scrap market remained depressed, closed at 1082 yuan/ton by the end of the month, down by 4.75% over the previous month; high carbon ferrochrome market was also in the weak trend, closed at 6013 yuan/ton by the end of the month. Cost reduction did not effectively improve the corporate profitability, and the weaker demand further dragged on the raw materials market. Many traders are pessimistic to the market outlook. They mainly think there will be no signs of improvement in the short term. Market price of raw materials may continue the weak consolidation in November, though with the possibility to continue dropping slightly.
2. Downstream markets
(i) Rolling Bearings
According to the data from China Machinery Industry Association, the output of rolling bearings in September was 1.62704 billion units, 1.59553 billion in August, rose by 1.97% over the same period last month.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales slightly increased MoM in September, though declined sharply YoY. From January to September, the decline range of output and sales in motorcycle sector expanded further. In September, the output and sales of motorcycle was 1,601,1000 and 1,603,200 sets respectively, up by 3.03% and 4.39% MoM, and down by 13% and 13.92% YoY. The year on year decline range was 5.33 and 4.68 percentage points higher than in August. In the first 9 months, the output and sales of motorcycles industry was totaled 14,255,000 and 14,269,800 sets, down by 8.78% and 8.98% respectively. The decline range was 0.55 and 0.66 percentage points higher respectively compared with January-August, and 0.76 and 1.1 percentage points higher respectively compared with January-June.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, the production and sales of automobiles showed rapid growth in September 2015, and the year-on-year decline range also narrowed, with a slight increase in sales. From January to September, the production declined slightly while sales remained basically flat compared with last year. In September, the automobile production was 1,894,300 sets, increased by 20.63%, and decreased by 5.64%; the automobile sales was 2,024,800 sets, hitting the two million sets since January after March, increased by 21.60% MoM and 2.08% YoY. From January to September, the output and sales of automobiles was 17,091,600 and 17,056,500 sets, wherein, the production fell 0.82 % YoY, sales grew 0.31% YoY.
III. Conclusions
Domestic bearing steel market price remained weak in October, wherein, the decline range narrowed compared with the previous month while the turnover was still weak. The prices of ore, high-carbon ferrochrome and other raw materials were still facing the downward pressure in November, so their support to bearing steel prices weakened. The overall economic performance of mechanical, travel and other downstream industries is not satisfactory, which attacked the market confidence. Coupled with the advent of off-season, the turnover is unlikely to improve. For now, most steel mills are at loss in varying degrees, which leads to less enthusiasm for production. Meanwhile, as the yields decreased, the magnitude of price decline is also limited. In summary, the overall trend in domestic bearing steel market is expected to hover at the bottom in November, with little possibility of further decline in market price.
(ii) The majority of steel mills reported YoY decrease in the output of bearing steel
Seen from Table 1 that the top three for bearing steel output from January to September 2015 are still Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneng Steel. (for Sha Steel, only the yield of Huai Steel is counted). Among these 23 companies, the crude bearing steel ouput of 3 companies rose while 18 fell, 2 out of production.
2. Export: export fell slightly YoY in September
Domestic bearing steel export was 118,180 tons in September, decreased by 9.49% YoY and 12.01% MoM. Total export volume in the first nine months was 92,099 tons, representing a reduction of 13.59% over the same period last year. In September, Xingcheng Special Steel reported the largest export volume of bearing steel, 9,755 tons, accounting for the vast majority of bearing steel exports.
It is understood that many steel mills have set their sights on the international market due to poor internal demand, and some of them even give a 200-300 yuan/ton preferential to encourage export.
3. Mainstream price policy in October: The majority of steel mills remained weak on a stable basis
Market demand remained sluggish in October, and the turnover was relatively light. Most steel mills kept the price being stably weak, while some cut the price down by 20-50 yuan/ton due to the impact of declining orders. For now, most steel mills are at loss in varying degrees, but the price is unlikely to fall further in November.
II. Relevant Markets
1. Raw materials market
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Imported ore prices fell down significantly in October, especially the port stocks, and closed at 48.95 dollar per dry metric ton at the end of the month; Carbon steel scrap market remained depressed, closed at 1082 yuan/ton by the end of the month, down by 4.75% over the previous month; high carbon ferrochrome market was also in the weak trend, closed at 6013 yuan/ton by the end of the month. Cost reduction did not effectively improve the corporate profitability, and the weaker demand further dragged on the raw materials market. Many traders are pessimistic to the market outlook. They mainly think there will be no signs of improvement in the short term. Market price of raw materials may continue the weak consolidation in November, though with the possibility to continue dropping slightly.
2. Downstream markets
(i) Rolling Bearings
According to the data from China Machinery Industry Association, the output of rolling bearings in September was 1.62704 billion units, 1.59553 billion in August, rose by 1.97% over the same period last month.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales slightly increased MoM in September, though declined sharply YoY. From January to September, the decline range of output and sales in motorcycle sector expanded further. In September, the output and sales of motorcycle was 1,601,1000 and 1,603,200 sets respectively, up by 3.03% and 4.39% MoM, and down by 13% and 13.92% YoY. The year on year decline range was 5.33 and 4.68 percentage points higher than in August. In the first 9 months, the output and sales of motorcycles industry was totaled 14,255,000 and 14,269,800 sets, down by 8.78% and 8.98% respectively. The decline range was 0.55 and 0.66 percentage points higher respectively compared with January-August, and 0.76 and 1.1 percentage points higher respectively compared with January-June.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, the production and sales of automobiles showed rapid growth in September 2015, and the year-on-year decline range also narrowed, with a slight increase in sales. From January to September, the production declined slightly while sales remained basically flat compared with last year. In September, the automobile production was 1,894,300 sets, increased by 20.63%, and decreased by 5.64%; the automobile sales was 2,024,800 sets, hitting the two million sets since January after March, increased by 21.60% MoM and 2.08% YoY. From January to September, the output and sales of automobiles was 17,091,600 and 17,056,500 sets, wherein, the production fell 0.82 % YoY, sales grew 0.31% YoY.
III. Conclusions
Domestic bearing steel market price remained weak in October, wherein, the decline range narrowed compared with the previous month while the turnover was still weak. The prices of ore, high-carbon ferrochrome and other raw materials were still facing the downward pressure in November, so their support to bearing steel prices weakened. The overall economic performance of mechanical, travel and other downstream industries is not satisfactory, which attacked the market confidence. Coupled with the advent of off-season, the turnover is unlikely to improve. For now, most steel mills are at loss in varying degrees, which leads to less enthusiasm for production. Meanwhile, as the yields decreased, the magnitude of price decline is also limited. In summary, the overall trend in domestic bearing steel market is expected to hover at the bottom in November, with little possibility of further decline in market price.
(CBCC)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
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