Monthly data: The upward trend of the bearing steel market slowed down in November

Overview: From January to September, the output of domestic crude steel bearing steel increased by 3.68% year-on-year, and the output of bearing steel fell 0.85% year-on-year. Looking back at the bearing steel market in October, the overall transaction performance was acceptable, and the market price still rose slightly. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 4963 yuan/ton, an increase of 10 yuan/ton from the end of September , A month-on-month increase of 0.2%. In the recent stage, wind power bearings, metallurgical bearings, engineering machinery bearings and other bearing supporting enterprises have acceptable demand. In addition, the output of some bearing steel manufacturers has decreased, and the market inventory pressure has eased. However, given that the current market price is relatively high, the price upside space in the later period is relatively limited, and the upward trend of the bearing steel market is expected to slow down in November.

1. Domestic production of bearing steel

(1) January-September output: crude bearing steel increased year-on-year, while steel decreased

According to statistics from the Special Steel Association, from January to September 2020, my country’s main premium special steel enterprises produced 2,793,300 tons of crude steel bearing steel, an increase of 3.68% compared to the same period last year; my country’s major premium special steels from January to September 2020 The company's bearing steel output was 2,364,600 tons, a decrease of 0.85% 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 September: the output of steel plants increased 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 60% of the total output. From January to September 2020, the overall output of bearing steel increased. Benxi Steel, Beiman, Shagang, Nangang, Zhongtian, Juneng, Jiyuan, CITIC Special Steel and other steel plants increased their output compared with the same period last year. Xinggang , Qilu, Xining, Laiwu Steel and other steel mills have slightly reduced output.

2. Performance of the domestic bearing steel market

The market price of bearing steel increased in October, and the transaction was fair. Judging from the feedback from major steel mills, the proportion of direct supply orders in the recent stage is indeed good, and the market social inventory has declined. The recent recovery of export orders has driven market demand to a certain extent, and the overall transaction preference of downstream industries such as domestic wind power bearings, metallurgical bearings, and engineering machinery bearings. With the continuous digestion of low-cost resources and the arrival of high-cost resources, it is expected that the bearing steel market in November will be supported or continue to look for upward momentum, but the upside is limited.

3. Relevant market information

(1) Raw material price:

The supply and demand pattern of imported iron ore weakened marginally in October, and prices fluctuated downward after the eleventh festival and stabilized at the end of the month. On the whole, the gap between supply and demand of iron ore expanded in November, and prices continued to be weak. However, we need to pay attention to the impact of the epidemic and weather on the pace of production and delivery on the supply side, as well as the improvement of domestic steel demand, the profit restoration of steel mills will support ore prices; the general carbon scrap market is operating at a high level and the average price at the end of the month is 2,450 yuan/ton . Affected by higher rebar prices and tight scrap supply, scrap prices are firm. At present, the profit of electric arc furnace steel mills is meager, and some steel mills are still on the profit and loss line, but the overall demand for scrap steel remains. It is expected that there is limited room for scrap steel prices to fall in November, and the overall operation will remain high; the market price of high-carbon ferrochrome is within a narrow range, and the price at the end of the month is 6011 yuan/ton. Both internal and external prices of chromium ore have been raised. The issue of South Africa’s export tariffs on chrome ore continues to ferment, and there is no final conclusion. It is expected that after the implementation of the tariff policy, the prices of internal and external disks will increase again.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in September 2020, the situation of my country's automobile industry continued to improve, and both the production and sales of automobiles showed double-digit growth that month. At the same time, under the influence of national and local consumption promotion policies, new energy vehicles have achieved rapid growth. In September, the production and sales of automobiles completed 2.524 million and 2.565 million, respectively, up 14.1% and 12.8% year-on-year. From January to September, the production and sales of automobiles were 16.957 million and 17.116 million respectively, down 6.7% and 6.9% year-on-year.

4. Conclusion

The overall market price of bearing steel rose slightly in October, and the transaction was fair. The steel output of Xinggang, Qilu, Xining, Laiwu Steel and other steel mills has decreased compared with the same period last year, but the total output of bearing steel wire rod has increased, especially in the wire rod market of Northeast Special Steel, Yonggang and Xianggang. The circulation ratio continues to increase. The pressure on some steel mills has also increased. Coupled with the current relatively high market prices, the momentum for steel prices to continue to rise no longer exists. The upward trend of the bearing steel market is expected to slow down in November, especially for wire rod varieties.