Monthly data: Bearing Steel Market will be still likely to shock in August

Monthly data: Bearing Steel Market will be still likely to shock in August

Overview: From January to June, the domestic crude steel production of bearing steel decreased by 2.15% year-on-year, and the output of bearing steel fell 1.51% year-on-year. Looking back at the bearing steel market in July, driven by the rising cost of steel mills and the strengthening of the futures market, the market price showed an overall upward trend. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 4743 yuan/ton. At the end of June, it rose by 27 yuan/ton, a month-on-month increase of 0.48%. The market price of bearing steel is expected to rise slightly in August.

1. Domestic Bearing Steel Production

1. Production from January to June: crude bearing steel and steel products both fell year-on-year

   According to statistics from the Special Steel Association, China’s main high-quality special steel enterprises produced 1,796,600 tons of crude steel for bearing steel from January to June 2020, a decrease of 2.15% compared to the same period last year; from January to June 2020, China’s major high-quality special steels The company's bearing steel output was 1.664 million tons, a decrease of 1.51% compared with the same period last year, as shown in Figure 1.

    

2. Finished product output of bearing steel production enterprises from January to June: steel mill output decreased year-on-year

   It can be seen from Figure 2 that the current large output of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian and Benxi Steel, which account for 64% of the total output. From January to June 2020, the overall output of bearing steel is declining. The output of Xinggang, Xining, Shigang, Qilu, Nangang, Zhongtian and other steel plants have all decreased, and the output of Benxi Iron and Steel, Beiman, Jiyuan, Jianlong and other steel plants This is a slight increase compared to the same period last year.

    

    

   Ⅱ.The domestic bearing steel market performance

   Looking back at the bearing steel market in July, due to the macro outlook and positive stimulus from futures, the market price showed an overall upward trend. It is expected that the bearing steel market will remain firm in August, and some materials may still rise.

    

   Ⅲ. Relevant market information

3. Raw material price:

   In July, the price of iron ore rose and fell, and the price at the end of the month was US$110.65/dry ton. The price increase in the first half of the year was driven by the seasonal decline of the forward supply side and the prominent structural contradictions of major varieties. Superimposed on the coordination of high domestic demand, the price continued to rise to 112 US dollars, the highest point during the year. After the second half of the year, the accumulation of port inventories increased, coupled with macro interference and the low season of steel demand, iron ore spot sentiment began to weaken. It is expected that the iron ore market in August will bear the dual pressure from the accumulation of port inventories and the easing of the structural contradictions of varieties. However, prices are unlikely to fall sharply under the support of high demand and may maintain a weak trend within the month; the general carbon scrap market Fluctuation upward, the average price at the end of the month was 2379 yuan/ton. The scrap steel market is expected to fluctuate at a high level in August; the price of the high-carbon ferrochromium market is weak, down 4% from the end of last month, and the market lacks favorable support for the time being. In July, the national output of high-carbon ferrochrome was 532,000 tons, an increase of 1.9% from June. Although the price of the new round of bidding has a high probability of falling, the market price has basically fallen ahead of schedule. It is expected that the price of ferrochrome will have limited changes, and the consolidation is mainly maintained.

    

4. Downstream industry

   According to the statistical analysis of China Association of Automobile Manufacturers, in June 2020, automobile production and sales continued to pick up momentum, and the month-on-month production and sales volume maintained growth compared with the same period last year. In June, the production and sales of automobiles were 2.325 million and 2.3 million, respectively, up 22.5% and 11.6% year-on-year. From January to June, the production and sales of automobiles were 10.112 million and 10.257 million, down 16.8% and 16.9% year-on-year, respectively. The decline continued to narrow, and the overall performance was better than expected.

    

Ⅳ. Conclusion

During the high temperature off-season, the demand for bearing steel is bound to be affected to some extent. However, under the support of supply-side reductions and the cost of raw materials, it is expected that the bearing steel market in August may have a slight opportunity to explore.