Monthly data: 2018 China Bearing Steel market trend will operate under pressure in December

Summary: Domestic crude steel output increased by 14.99% year-on-year in January-November, bearing steel output increased by 16.52% year-on-year. Up to now, the low-cost resources for continuous casting and non-annealing materials in China are 4,600 yuan/ton; the mid-range materials are priced at 5,000 yuan/ton; the high-end materials are 6,200 yuan/ton. It is expected that the market price of bearing steel will operate under pressure in December.

I. Domestic bearing steel production

1.The production of January-October:  crude steel, bearing steel both rose year-on-year

According to the statistics of the Special Steel Association, the output of crude steel for bearing steel of the main U-steel enterprises in China from January to October 340.34 million tons, an increase of 14.99% compared with the same period of last year; the main special steel output of enterprise bearing steel was 325.36million tons in China from January to October 2018, an increase of 16.52% compared with the same period of last year. See Figure 1.

2. Bearing steel production of various production enterprises from January to October: steel mill output increased year-on-year

As can be seen from Figure 2, the current bearing steel output is: CITIC Special Steel (Xinye Steel, Xingcheng Special Steel, Qingdao Iron and Steel), Zhongtian and Giant Energy, accounting for 58% of the total output. In the first six months of January and October, the overall output of bearing steel increased. The output of steel mills such as Jiyuan, Shagang, Zhongte, Nangang and Sugang increased compared with the same period of last year, but Xing Gang, Bent, Jianlong and Beiman decreased slightly.

II.The domestic bearing steel market performance 

Looking back at November, the price of high-end materials and the resources of medium and low prices are slightly down, with decreasing of 300~400 RMB/ton. Looking forward to the bearing steel market in October, it is expected that the market price of bearing steel will operate under pressure in December.

III. Relevant market information 

1. Raw material price:

In November, the import minerals market fluctuated downwards. The price at the end of the month was 65.5 US dollars per dry ton. The overall ordinary carbon scrap market rose slightly. The average price at the end of the month was 1997 yuan/ton, up 17.1% from the end of last month. The high carbon ferrochrome market was weak. The average price at the end of the month is 6,970 yuan / ton.

2. Downstream industry

According to the statistical analysis of the China Association of Automobile Manufacturers, in October 2018, automobile production  decreased slightly, and sales decreased, a slight decrease year-on-year. From January to October, automobile production and sales decreased . In October, the automobile production was 2,334.5thousand units, a decrease of 0.92% from the previous month and an decrease of 10.05% from the same period of last year. The sales volume was 2,380.1 thousand units, a decrease of 0.58% from the previous month and an decrease of 11.7% from the same period last year. From January to October, the production and sales of automobiles were 2,2825.8thousand and 22,078.9 thousand a year-on-year decrease of 0.39% and 0.06%.

Ⅳ. Conclusion 

Looking back at November, the price of high-end materials and the resources of medium and low prices are slightly down, with decreasing of 300~400 RMB/ton. The market price of bearing steel is expected to operate under pressure in December .