Monthly data: The bearing steel market will be fluctuate in August

 Monthly data: The bearing steel market will be fluctuate in August

Overview: From January to June, the domestic crude steel production of bearing steel increased by 35.32% year-on-year, and the production of bearing steel increased by 28.93% year-on-year. Looking back at the bearing steel market in July, under the influence of the expected improvement in the macro picture and the expected production limit in the second half of the year, the market price showed a volatile upward trend. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 6,536 yuan/ton, an increase of 66 yuan/ton from the end of June, and a month-on-month increase of 1.02%. It is still in the traditional off-season, and the demand for bearing steel is bound to be affected. Coupled with the expansion of the impact of public health incidents in many places, the machinery manufacturing industry still performs poorly. It is expected that the bearing steel market prices in August will not have sustained upward momentum, or will fluctuate and adjust operations.

1. Output of domestic bearing steel

 ( 1 ) Bearing steel output from January to June 2021 : crude steel and steel increased year-on-year  According to the statistics of Special Steel Association, the crude steel output of bearing steel in China ' s main excellent special steel enterprises from January to June 2021 was 24.191 million tons, which increased by 35.32 % compared with the same period last year.  From January to June 2021, the output of bearing steel in China 's major special steel enterprises reached 25.99 million tons, an increase of 28.93 % over the same period last year, as shown in figure 1.

( 2 ) Output of finished products of bearing steel enterprises from January to June 2021 : output of steel mills increased year on year  It can be seen from Fig. 2 that the current production enterprises with large bearing steel production are CITIC Special Steel ( Xingcheng Special Steel, Daye Special Steel, Qingdao Steel ), Zhongtian and Benxi Steel, accounting for 59 % of the total output.  The overall output of bearing steel increased from January to June in 2021. The output of Beiman, Shagang, Xinggang, Nangang, Jiyuan, Xining, Zhongte and Jueng steel plants increased compared with the same period last year. Only the output of Shigang, Jianlong, Benxi and Zhongtian steel plants decreased slightly.

2. Performance of domestic bearing steel market  

In July, the domestic bearing steel market showed a turbulent upward trend, market confidence gradually increased. It is reported that some steel plants such as Nangang, Jiyuan and Jueng have maintenance plans in the later period, and the supply pressure may be alleviated. However, in the recent stage, the demand of bearing steel pipe mills and forging mills has declined significantly, and the end-users have been cautious in purchasing, and the market sentiment is strong. The short-term high temperature weather continues, coupled with recent public health events, the supporting effect of demand on prices is relatively limited, and the driving force for steel prices to continue to rise disappear. It is expected that the domestic bearing steel market price will be adjusted in August.

3. Relevant market information

 ( 1 ) Raw material price : In July, the price of iron ore fluctuated downward, and the gap between supply and demand turned negative. At the end of the month, the Mysteel 62 % Australian powder index was USD 180.2 per ton. August iron ore will continue the pattern of relatively loose supply. In the environment of abundant port resources supply and improved structural contradictions, the iron ore structure has a downward power, but the profit of steel plants continues to increase, which makes the raw material price fall space limited. Therefore, it is expected that the price of iron ore in August will be weak. Domestic scrap prices fell after the rise, the average monthly price at 3296 yuan / ton. Under the influence of limited production and power, the overall demand of scrap steel decreases significantly, and the price of scrap steel will follow the decline of finished products in a short time. However, due to the high temperature weather is still continuing, the waste steel market is still in the situation of weak supply and demand, and the steel demand will gradually release in September. At the same time, the policy of limiting production and limiting electricity will support the price of steel. The market has good expectations for the future market, and there is a certain support for the price of waste steel. The price of waste steel will have the possibility of falling and rising. High carbon ferrochrome market prices rose sharply, the price at the end of the month at 11011 yuan / ton. At present, the main production areas in China have entered a state of power limitation, and the problem of chromium market supply is becoming more and more prominent. Although the substantial increase of chromium iron export tariffs can effectively inhibit the export of chromium iron, this part of the number is relatively limited and cannot affect the overall supply and demand.

( 2 ) Downstream industries  

According to the statistics of the China Automobile Industry Association, in June 2021, automobile production and sales completed 1.943 million and 2.015 million, respectively, a decline of 4.8 per cent and 5.3 per cent year on year, a decline of 16.5 per cent and 12.4 per cent year on year. In June, automobile production and sales continued to show a significant decline after May, among which passenger cars were mainly affected by insufficient chip supply, and commercial vehicles were related to the switching of emission standards. From January to June, more than 12 million cars were produced and sold, up more than 20 per cent year on year, and the overall growth momentum remained fast.

4. Conclusion  

In July, the price of bearing steel fluctuated upward, and market confidence increased.  With the continuous fermentation of production limit news and the frequent occurrence of multi-ground power limit policies, the supply of bearing steel has also contracted. At present, the price difference between GCr15 and 45 # carbon steel is still at a normal level, and the price difference of most steel plants is 500-700 yuan / ton, which gives some support to the market. However, the performance of downstream industries such as automobile bearings, engineering machinery bearings and metallurgical bearings in the recent stage is not satisfactory. The orders of forging plants are slightly better, and the orders of steel pipe plants decrease significantly. The purchase of end users is more cautious. Due to the expansion of public health events and high temperature rain weather, the downstream demand of manufacturing industry is difficult to recover in the short term. It is expected that the market price of bearing steel will fluctuate and adjust in August.