Monthly data: Bearing Steel Market will Operate under Pressure in May

Monthly data: Bearing Steel Market will Operate under Pressure in May

Summary: From January to March, domestic bearing steel crude steel output increased by 1.97% year-on-year, and bearing steel output increased by 3.92% year-on-year. Looking back at the bearing steel market in April, fundamental improvement continued to be less than expected, and GCr15 market prices fluctuated weakly. Up to now, the domestic low-cost resources of continuous casting non-annealed materials are 4150 yuan / ton; mid-range materials are quoted at 4300 yuan / ton; high-end materials are 5100 yuan / ton. In view of the relatively limited support effect of the demand link on prices, the rate of decline in inventories is slower than expected. It is expected that the price of the bearing steel market will operate under pressure in May, and some materials are more likely to be weak.

Ⅰ. Domestic Bearing Steel Production

1. Production from January to March: crude steel and steel of bearings both increased year-on-year

According to the statistics of the Special Steel Association, the output of crude steel for bearing steel in China's major special steel companies was 946,800 tons from January to March 2020, an increase of 1.97% compared with the same period last year; The company's bearing steel output was 848,500 tons, an increase of 3.92% compared with the same period last year. See Figure 1.

2. From January to March, the output of finished steel of various bearing steel manufacturers: the output of steel mills increased year-on-year

As can be seen from Figure 2, the current bearing steel output is relatively large: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian Steel and Benxi Steel, accounting for 68% of the total output. From January to March of 20 years, the overall output of bearing steels has increased. The output of steel plants such as Jianlong, Beiman, Jiyuan, Bent, Shagang, CITIC Special Steel, and Zhongtian have increased. The output of steel mills such as Shigang decreased slightly compared with the same period last year.

Ⅱ.The domestic bearing steel market performance

The bearing steel market showed a downward trend in April, with a decline of 50-150 yuan / ton, and the demand was not satisfactory. At present, the demand of bearing steel pipe factories and forging plants has declined significantly, end users are more cautious in purchasing, and the market wait-and-see mood is strong. In recent phases, major bearing steel producers have seldom reduced production and overhauled, and the contradiction of oversupply in the later stage is still acute. In view of the relatively limited support effect of the demand link on prices, it is expected that the price of bearing steel may be weak in May.

Ⅲ. Relevant market information

Raw material price:

The price of imported mines fluctuated in April, and the price at the end of the month was US $ 82.4 / ton. Recently, the cost of resources in Hong Kong is low, or the bargaining power of traders is weakened. Therefore, although the short-term mine prices are running strongly, the increase rate is limited; the general carbon scrap market has first suppressed and then increased, with an average price of 2149 yuan / ton at the end of the month. At present, the overall inventory of scrap steel has declined from the previous period, and the accumulation of market resources will take some time to recover. The short-term support for scrap prices is strong; the high-carbon ferrochromium market prices are running strongly, up 4.91% from the end of last month, and the average price at the end of the month 6233 yuan / ton.

2. Downstream industry

According to the statistical analysis of the China Association of Automobile Manufacturers, in March 2020, with the orderly recovery of production and operation, the decline in the production and sales of automobiles was narrowed. The production and sales of automobiles were 1.422 million and 1.43 million respectively, an increase of 399.2% and 361.4% from the previous month, and a decrease of 44.5 year-on-year % And 43.3%. From January to March, automobile production and sales completed 3.474 million units and 3.672 million units, respectively, with a year-on-year decrease of 45.2% and 42.4% respectively.

Ⅳ. Conclusion

Looking back on April, the market performance of the bearing steel market has weakened, and some low-grade materials have shown a slight decline. In view of the increasing gap between the price of GCr15 and 45 # carbon steel, Zhongtian, Nangang, Jianlong and other steel mills have reached 650-800 yuan / ton, making end-user purchases more cautious. . It is expected that the domestic bearing steel market price will face continued adjustment in May, and the possibility of weak shocks is greater.