Monthly Summary: The market price of bearing steel may be under pressure in July

  Monthly Summary: The market price of bearing steel may be under pressure in July

Overview: From January to May 2025, the crude steel production of domestic bearing steel decreased by 5.22% year-on-year, while the production of bearing steel increased by 6.83% year-on-year. Looking back at the market situation in June, terminal procurement continued to adopt a cautious attitude, with market orders mainly focused on "small batch, on-demand procurement", and market prices showing a downward trend. As of now, the absolute price index of domestic bearing steel is 4877 yuan/ton, a decrease of 57 yuan/ton or 1.16% from the beginning of the month. At present, the motivation for traders and end-users to stock up has weakened, and the market mentality is mainly cautious and wait-and-see. It is expected that the bearing steel market price will be under pressure in July.

Ⅰ Domestic production of bearing steel

1. Bearing steel production from January to May 2025: crude steel decreased year-on-year, steel increased year-on-year

According to statistics from the Special Steel Association, the crude steel production of bearing steel by major special steel enterprises in China from January to May 2025 was 2.0739 million tons, a decrease of 5.22% compared to the same period last year; The production of bearing steel by major special steel enterprises in China from January to May 2025 was 1.5494 million tons, an increase of 6.83% compared to the same period last year.

2. June 2025 bearing steel production: steel production increases month on month

According to the 21 samples collected by the Bearing Steel Research Group, the production of bearing steel by major special steel enterprises in China in June 2025 was 404500 tons. Among them, 318900 tons of rods, accounting for 78.84%; 85600 tons of wire, accounting for 21.16%.

According to the research sample, it can be seen that the number of bearing steel bars in June decreased compared to the previous month, while the number of wire rods increased compared to the previous month. The total amount of bearing steel increased by 1.84% month on month, rod decreased by 3.74%, and wire increased by 27.86%.

3. From January to May 2025, the output of finished materials of various bearing steel production enterprises: the total output of steel mills increased slightly

At present, the production enterprises with large output of bearing steel are CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Special Steel), Jiyuan Steel, and Juneng, accounting for 68.68% of the total output. The overall production of bearing steel increased slightly from January to May 2025, with production from steel mills such as CITIC, Benxi Iron and Steel, Jiyuan, and Jiangsu Yonggang increasing compared to the same period last year, while production from steel mills such as Juneng, Zhongtian, Nangang, and Shigang decreased compared to the same period last year.

Ⅱ Performance of domestic bearing steel market

In June, the overall bearing steel market showed a trend of weak supply-demand balance and price decline. At present, there is a shortage of orders in downstream industries such as machinery and automobiles, and procurement is mainly based on "small orders for essential needs". There is a lack of bulk stocking power, and market prices are under significant pressure. The price of bearing steel has slightly fallen by 3% compared to May, and the downward range of converted prices is between 30-80 yuan/ton. In June, some steel mills underwent maintenance, and the supply and demand temporarily eased. However, the terminal mentality was cautious, and the release of purchasing momentum was relatively restrained, resulting in fewer bulk orders. Overall, it is expected that the price of bearing steel will be under pressure in July.

Ⅲ Related market information

1. Raw material prices

The 62% Australian flour forward price index is 93.6 US dollars per dry ton, a decrease of 2.15 yuan per ton from the beginning of the month, a decrease of 0.23%. Looking ahead to the second half of the year, iron ore supply will continue to strengthen. On the one hand, new mines will release production capacity, such as Simandou, Liberia, Sierra Leone, etc. On the other hand, the cost lines of existing mines are mostly below $85, and current price fluctuations have little impact on this supply. In terms of inventory, the degree of oversupply in the second half of the year is expected to increase significantly compared to last year, with an estimated excess of about 20 million tons of iron in the second half of the year; In addition, the purchasing mentality of steel mills remains stable, and the current situation will not require additional inventory replenishment. It may even continue to compress inventory, and excess inventory may accumulate in traders' inventory, increasing the risk of decline. Overall, it is expected that there is a significant risk of iron ore prices falling in the second half of the year, and short-term iron ore prices will fluctuate weakly.

The current spot price of high carbon ferrochrome is 7800 yuan/ton, a decrease of 200 yuan/ton or 2.5% from the beginning of the month. On June 30th, the spot price of high carbon ferrochrome remained stable, with chrome ore prices, coke prices, national freight and electricity prices all operating steadily. The immediate cost of high carbon ferrochrome temporarily stabilized, and chrome ore remained in demand. Business offers remained stable, and it is expected that the cost of high carbon ferrochrome will remain stable in the short term.

The current price of scrap steel is 2050 yuan/ton, an increase of 10 yuan/ton or 0.49% from the beginning of the month. As of the end of June, the macro level impact was flat, and the market operation logic was attributed to fundamentals. In terms of steel mills, the operating rate and capacity utilization rate of electric furnace plants have both decreased, and with the arrival of the peak electricity consumption period in summer, the cost of electricity may increase, squeezing profit margins. Steel mills have more plans for maintenance and production reduction, and the demand for scrap has declined. At the same time, there is still a possibility of further expansion of the iron scrap gap. Scrap steel lacks cost-effectiveness advantages compared to molten iron, and steel mills have weaker willingness to use scrap, which is bearish on scrap steel prices. In terms of the market, due to the hot and rainy summer weather, the output of scrap steel has further declined, making it more difficult to receive goods at the site. At the same time, the total inventory of the site remains low, and there is a possibility of further decline in scrap steel supply, which may provide some support for scrap steel prices. Overall, the current weak supply-demand pattern still persists, with insufficient downstream demand and pressure on finished product prices. Coupled with the low cost of molten iron, scrap steel prices may be dragged down. Although market resources are generally tight, it is difficult to provide long-term support. Therefore, it is expected that the scrap steel market prices will continue to decline in July.

2. Downstream industry

From January to May 2025, the production and sales of automobiles reached 12.826 million and 12.748 million respectively, an increase of 12.7% and 10.9% year-on-year. In terms of exports, a total of 2.85 million vehicles were exported from January to May, a year-on-year increase of 16.8%. The automobile market continues to show a good trend, with production and sales increasing by more than 10% compared to the same period last year, and both domestic demand and exports have performed well. Among them, the passenger car market has shown active performance, the commercial vehicle market still needs to recover, new energy vehicles continue to grow rapidly, and the growth rate of automobile exports has significantly increased. The proportion of raw material inventory decline in sample enterprises in the automotive industry is about 9.93%. The overall daily consumption and available days of raw materials in the industry have both declined. Currently, the automotive industry has high market saturation, significant pressure to reduce inventory, and average market sentiment. If favorable policies are intensified in the later stage, coupled with the accelerated pace of product updates and upgrades by car companies, the consumption of bearing steel may steadily increase.

Ⅳ Summary

In terms of cost, the prices of iron ore and chromium ore in terms of raw materials may stabilize, coupled with the low inventory strategy of steel mills, the downward space for bearing steel is supported by costs. On the supply side, some companies completed maintenance in June, but overall production remained stable. The increase in production was constrained by weak demand and limited market inventory pressure. In terms of demand, downstream automotive and machinery industries still rely mainly on rigid needs for procurement. Although the demand for new energy vehicles and wind power is stable, real estate investment has decreased by 10.7% year-on-year, and new construction has declined by 22.8%. Coupled with the suppression of construction during the high temperature and rainy season, the overall steel consumption is difficult to significantly increase. Overall, it is expected that the market price of bearing steel will be under pressure in July.