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

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

Overview: From January to August, the output of domestic crude steel bearing steel rose by 0.75% year-on-year, and the output of bearing steel rose 2.35% year-on-year. Looking back at the bearing steel market in September, terminal demand was clearly released, and market prices continued to strengthen. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 4953 yuan/ton, an increase of 48 yuan/ton from the end of August. The month-on-month increase was 0.98%. In the recent stage, the demand of wind power bearings, metallurgical bearings, engineering machinery bearings and other bearing supporting enterprises has improved. The "Silver Ten" can also be expected. It is expected that the bearing steel market will continue to rise in October.

1. Domestic production of bearing steel

(1) January-August output: crude bearing steel and steel both increased year-on-year

According to statistics from the Special Steel Association, from January to August 2020, my country’s main high-quality special steel enterprises produced 2,443,500 tons of crude steel bearing steel, an increase of 0.75% compared to the same period last year; from January to August 2020, my country’s main high-quality special steel The company's bearing steel output was 2,185,900 tons, an increase of 2.35% 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 August: the output of steel mills increased year-on-year

It can be seen from Figure 2 that the current largest output of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian and Benxi Steel, accounting for 62% of the total output. From January to August 2020, the overall output of bearing steel increased, and the output of Benxi Steel, Beiman, Jiyuan, Jianlong and other steel plants increased compared with the same period last year. Steel mills such as Xing Steel, Qilu, Xining, Nangang, Juneng, Zhongtian, and CITIC Special Steel have slightly reduced their output.

2. Performance of the domestic bearing steel market

Looking back at the bearing steel market in September, terminal demand was clearly released and market prices continued to strengthen. In the recent stage, the demand of wind power bearings, metallurgical bearings, engineering machinery bearings and other bearing supporting enterprises has continued to improve. In addition, the output of some bearing steel manufacturers has decreased, and the pressure on the supply side of the market has eased. From the current point of view, the trend of steel mills pushing up will not stop in the short term, and the market price of bearing steel will continue to rise in the later period. Gold 9 is expected to be partially fulfilled, and Silver 10 can also be expected. It is expected that the bearing steel market prices in October will still have room for upside.

3. Relevant market information

(1) Raw material price:

In September, iron ore prices declined weakly, and steel mills were more cautious in purchasing, mostly on-demand procurement. On the basis of a small decrease in demand and an increase in supply, the imported mine market may still fluctuate downward, but we need to be alert to the impact of changes in production restriction policies; the general carbon scrap market fluctuates downward, with the monthly average price at 2397 yuan/ton. The current low-price scrap has caused electric furnace companies to fully start and resume production, pushing up the already high inventory of finished materials. Leading long-process enterprises will inevitably suppress the supply-side electric furnaces by increasing scrap prices. The current profit level of steel mills is not high. In addition, this year's North Material southward move may be advanced. It is expected that the scrap steel market after the holiday may rise first and then fall; the price of high-carbon ferrochrome market is weak, and the price at the end of the month is 6022 yuan. /Ton. The current shortage of spot resources in the domestic ferrochrome retail market has not yet eased. The price of ferrochrome is expected to have little short-term market fluctuations. However, it is necessary to pay attention to the negative impact of the increase in imported ferrochrome stocks of mainstream steel mills on the purchase price of domestic ferrochrome resources.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in August 2020, the overall situation of automobile production and sales was stable. The month-on-month output declined slightly, and the sales volume increased slightly. In August, the production and sales of automobiles completed 2.119 million and 2.186 million respectively. The production volume fell 3.7% month-on-month, sales volume increased 3.5% month-on-month, and year-on-year growth of 6.3% and 11.6% respectively. Production and sales have shown growth for five consecutive months, and sales have maintained a growth rate of more than 10% for four consecutive months. From January to August, the production and sales of automobiles were 14.432 million and 14.551 million respectively, a year-on-year decrease of 9.6% and 9.7% respectively, and the decline continued to narrow by 2.2 and 3 percentage points from January to July.

4. Conclusion

In September, the market price of bearing steel showed an overall upward trend, with most steel mills accumulatively increasing at RMB 50-150/ton. At present, the output of bearing steel in steel plants such as Xinggang, Shigang, Xining, Nangang, Juneng, and Zhongtian has decreased compared with the same period last year, and the pressure on the supply side has decreased. Judging from the feedback from major steel mills, the proportion of direct supply orders in the recent stage is indeed good. Therefore, the amount of bearing steel resources circulating in the market is not large, and the market inventory pressure is not large.

Given the good performance of supply and demand fundamentals, it is expected that the bearing steel market will continue to rise in October, especially for high-end materials.