Monthly data: Bearing Steel Market will be still likely to rise in September

Monthly data: Bearing Steel Market will be still likely to rise in September

Overview: From January to July, the output of domestic crude steel bearing steel fell by 2.26% year-on-year, and the output of bearing steel rose 0.41% year-on-year. Looking back at the bearing steel market in August, downstream demand has rebounded, and market prices continue to fluctuate and strengthen. So far, the average price of domestic bearing round steel 50mm (continuous casting) is 4928 yuan/ton, an increase of 185 yuan/ton from the end of July, month-on-month. An increase of 3.90%. Entering the traditional peak season in September, the fundamentals may improve, and the bearing steel market is expected to have room for growth in September.

1. Domestic production of bearing steel

(1) Output from January to July: Crude steel for bearings decreased year-on-year, and steel increased year-on-year

According to statistics from the Special Steel Association, from January to July 2020, my country’s main high-quality special steel enterprises produced 2.0884 million tons of crude steel bearing steel, a decrease of 2.26% compared to the same period last year; from January to July 2020, my country’s main high-quality special steels The company's bearing steel output was 1,887,800 tons, an increase of 0.41% compared with the same period last year, as shown in Figure 1.

(2) The output of finished products of bearing steel production enterprises from January to July: the output of steel mills increased slightly year-on-year

It can be seen from Figure 2 that the current output of bearing steel is relatively large: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian and Benxi Steel, which account for 63% of the total output. The overall output of bearing steel increased from January to July 2020. The output of Benxi Iron and Steel, Beiman, Jiyuan, Jianlong and other steel plants increased compared with the same period last year. Xing Steel, Qilu, Xining, Nangang, Juneng, China The output of Tiandeng Steel Plant decreased slightly.

2. Review of domestic bearing steel market performance

Looking back at the bearing steel market in August, downstream demand has picked up, and market prices have fluctuated upwards. In the recent stage, the demand for bearing supporting enterprises such as automotive bearings, wind power bearings, and engineering machinery bearings has continued to improve, and the market inventory pressure has eased. Market confidence is expected to be further strengthened. With the continuous digestion of low-cost resources and the arrival of high-cost resources, the bearing steel market is expected to perform strongly in September.

3. Relevant market information

(1) Raw material price:

In August, the price of iron ore rose and fell. In the first half of the year, the structural contradictions of the varieties and the high basis difference in the future led to the price increase; in the second half of the year, the profit reduction of steel mills and the combination of regional production restrictions led to price drops. With the gradual improvement of the global epidemic situation, overseas blast furnace production is gradually recovering. However, China is facing a possible production restriction policy during the fall and winter and National Day. With regard to the weakening of iron ore demand, it is expected that the iron ore price in September will fall under the production restriction policy. Under the influence, there is a risk of callback; the general carbon scrap market fluctuates upward, and the monthly average price is 2449 yuan/ton. The high temperature weather has led to a decline in the output of scrap steel, a decline in scrap steel receipts at bases and terminals, and a decrease in the market's scrap steel circulation resources. At the same time, the cost of scrap steel processing and transportation in the freight yard has increased, resulting in less than the daily consumption of scrap steel in the steel plant, which can only increase the receipt. "Golden September" is approaching, the market expects better demand for rebar, and the sentiment is higher. Scrap prices may show up; the price of high-carbon ferrochrome market is weak, and the price at the end of the month is 5972 yuan/ton , The market lacks favorable support for the time being. It is expected that the price of ferrochromium will have limited changes in the short term, and the consolidation will be the main focus.

(2) Downstream industries

According to the statistics and analysis of the China Association of Automobile Manufacturers, in July 2020, the overall situation of automobile production and sales was stable. The month-on-month production and sales volume declined slightly from the previous month, and the year-on-year growth continued. Among them, the growth rate of commercial vehicles was still significant. In July, the production and sales of automobiles were 2.201 million and 2.112 million, a decrease of 5.3% and 8.2% month-on-month, and an increase of 21.9% and 16.4% year-on-year. From January to July, the production and sales of automobiles were 12.314 million and 12.365 million, a year-on-year decrease of 11.8% and 12.7%, respectively. The decline was 5 and 4.2 percentage points lower than that from January to June.

4.Conclusion

Looking back at the bearing steel market in August, driven by the upward movement of steel mill costs and the recovery of downstream demand, the market price showed an overall upward trend, with most steel mills accumulating an increase of 150-200 yuan/ton. It is expected that the bearing steel market still has room to rise in September.