The Bearing Steel Market is to Operate in Weakness Consolidation State in June
Resource from: CBCC Likes:3030
Jun 07,2012
Looking back of the domestic bearing steel market in May, the price of GCr15Φ50mm continuous casting non-annealed steel was firstly increased and them fell, with the market transactions gradually shrinking. Up to the end of May, the average price of GCr15Φ50mm continuous casting non-annealed steel around China was 5,770 yuan/ton, 6 yuan higher per ton compared with the price at the end of previous month; the average price of GCr15Φ100mm continuous casting annealed steel was 8100 yuan/ton, the same with the price at the end of previous month (some modifications applied to the statistical method).
The steel market can be said to have entered a low tide period, especially in the last two months, both the market price and the market mentality are at a relative low level. There were still signs that bearing steel market prices rose slightly in early May, but the quoted prices fell as the market participants' mentality became poor affected by multiple factors, for example, the turnover was shrinking while the spot resources was growing in number due to the high production of steels. Now the market participants generally put more attention to the changes in macro-policy, as it is difficult for the steel market to get improved all by itself. On short terms, the bearing steel market will not be greatly improved, and it is expected to run in weak consolidation state in June.
I. Domestic Output Situation of Bearing Steel
From January to April in 2012, the domestic output of crude steel by major quality special steel producers was about 1.057 million tons, 8.4% declined compared with the same period last year; the output of bearing steel of major quality special steel producers was 1.005 million tons, 4.7% declined compared with the same period last year. In April, the domestic output of crude steel and bearing steel was respectively 301,000 tons and 297,000 tons.
Figure 1: Change in Domestic Output of Bearing Steel (crude steel) from 2011 to 2012
Data Resource: Special Steel Association
Table 1: Domestic Output of Crude Steel by Bearing Steel Manufacturers from January to April in 2012 (Unit: ton)
Seen from Table 1 that the top three for bearing steel output from January to April in 2012 are still Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneng Steel, and the rankings of other steel mills do not change much (for Sha Steel, only the yield of Huai Steel counted). Zhongxin Special Steel that ranks the first are gradually approaching the level of the same period last year and have posed relatively large impact on the pick-up of production in bearing industry.
II. Performance of Domestic Bearing Steel Market in May:
(i) The export volume of bearing steel from January to April in 2012 continued to fall
According to the statistical data released by the ten major domestic bearing steel manufacturers, the export volume of bearing steel in April was 6,270 tons, 54 declined compared with the same period of last year, and the total export volume was from January to April only 25,453 tons. The export situation of the domestic bearing steel industry is really worrying.
Figure 2: Bearing Steel Export Situation in Major Domestic Special Steel Enterprises from 2011 to 2012
Data Resource: MRI
(ii) The bearing steel market experienced shock consolidation in May
In May, the prices in the bearing steel market firstly rose and then fell within a relatively smaller range. According to the statistical data released by China Steel Association, the national crude steel output reached a high level in May, the steel output greatly increased, and the delivery progress was fast, resulting in greater pressure on the spot market. As for traders, they mainly had many stocks but the turnover was gradually shrinking, so the relationship between supply and demand became unbalanced. The detailed situations of bearing steel market across the country in May are as follows:
The price range of bearing steel in Hangzhou market fluctuated and the market transactions was gradually shrinking. Up to the end of May, the average knock-down price of standard GCr15 continuous casting non-annealed steel was from 5,350 to 5,500 yuan/ton, and the average knock-down price of GCr15 die-casting annealed steel was between 7,600 and 7,700 yuan/ton.
Bearing steel prices in Luoyang market ran in the vulnerable consolidation state and the deal was light. Up to the end of May, the average knock-down price of standard GCr15 continuous casting non-annealed steel was from 5,600 to 5,750 yuan/ton, and the average knock-down price of GCr15 die-casting annealed steel was between 7,600 and 7,700.
Bearing steel prices in Xi'an market were basicly stable and the deal was commom. Up to the end of May, the spot goods of standard GCr15 continuous casting non-annealed steel was relatively insufficient, and the average knock-down price of GCr15 die-casting annealed steel was from 7,700 to 7,800 yuan/ton.
As for Chongqing and Chengdu markets, the prices became stable for temporary, and the turnover slightly slowed down. Up to the end of May, the average knock-down price of standard GCr15 continuous casting non-annealed steel was from 5950 to 6150 yuan/ton, and the average knock-down price of GCr15 die-casting annealed steel was around 7,600 yuan/ton.
Figure 3: Average Price Trend of Domestic Bearing Steel from 2011 to 2012
Data Resource: Mysteel
According to the statistics from Mysteeel.com: up to the end of May, 2012, the average price of GCr15 Φ50mm continuous casting non-annealed steel in China was 5,770 yuan/ton; the average price of GCr15 Φ100mm die-casting annealed steel was 8,100 yuan/ton. (some modifications applied to the statistical method)
Table 2: Summary of Sales Price of Major Bearing Steel Manufacturers in East China (standard continuous casting non-annealed steel bar) Unit: yuan
Table 2 shows that the bearing steel prices in East China rose slightly in May and the overall trend was "first rise and then fall", showing a certain increase compared with the beginning of the month.
III. Domestic Bearing Steel Market will Experience Vulnerable Consolidation:
1. Raw materials
The high-chrome prices dropped in May, and the quoted price at the end of the month was around 7900 yuan/ton, 150 yuan/ton fell compared with last month. Nowadays, steel mills rarely purchase reserving iron ores or other raw materials in advance, so the ore price is difficult to experience ups and downs, and the price of raw materials also has less impact to the steel market than before.
Figure 4: Average Price Trend of Domestic High Carbon Ferrochrome from 2011 to 2012
Data Resource: Mysteel
2. Steel Mills
Fron January to April, there was a return in the production of crude steel nationwide, and the crude steel production reached a high level in May. But few people would applause for this new high, as no data so far can prove that the level of demand in May also stand at the history high level, instead, people tend to feel that the overall demand this year is not so strong as in previous years. The concept of the traditional busy season has already been dispelled, the market practice has been repeatedly broken, the demand growth can not keep pace with that of capacity expansion, the pace of economic slows down, and the industry contradictions gradually arise.
3. Steel Market
In the first quarter of this year, China's economic growth has eased to 8.1%, which is the lowest growth rate in the past three years. The World Bank disclosed at its news conference for East Asia & Pacific Economic Update that China's GDP growth would fall from 8.4% in the first half of 2012 to 8.2%. In the first quarter and April, the situation in downstream industries of steel such as infrastructure construction, real estate, automotive, machinery, shipbuilding, etc. did not improved markedly. Compared with the same period last year, the growth rate of all main indicators obviously declined, wherein, the new construction and sales area of real estate, the completion amount of shipbuilding, the investment in railway construction and other indicators even showed negative growth year-on-year. The global economy continued to slow down, the decline in demand both home and abroad is the main reason for the new low in the growth rate of industrial added value in the April. Though the bearing steel market which has higher degree of dependence on the steel market environment failed to escape from the weak tendency, the level of downstream demand was not so bad, and the output of the supporting products of rolling bearings reached 5.966655700 billion sets in the first quarter, indicating significant increase compared with 4.6991868 billion sets in the same period last year.
4. Market Outlook
The Ministry of Railways made a loss of about 7 billion in the first quarter, and the debt ratio remained high, which blowed the market confidence which just recovered a little all at once. The total negative profit in the first quarter of last year was 3.76244 million yuan, compared with which, the loss in the first quarter of this year was almost twice that of last year. Due to the high-speed rail accident last year, 90% of the national railway projects in construction were shut down by the end of last year, the sizeable "ice blockage" led the domestic rail development to fall at the lowest point in recent years. Entering in May 2012, the National Development and Reform Commission has speeded up the project approval. Although many projects in the downstream industries including the railways, highways, infrastructure construction and new energy industries recently received many approvals, it still takes time for them to have the practical effect to the market, and the steel market economy may have to realize overall recovery in the period of July to August which is also the opportunity for the traditional off-season of the steel market to drop away. It is expected that the bearing steel market will operate in the vulnerable consolidation state, and the current steel prices were relatively low, which indicates limited dropping space.
Figure 1: Change in Domestic Output of Bearing Steel (crude steel) from 2011 to 2012
Data Resource: Special Steel Association
Table 1: Domestic Output of Crude Steel by Bearing Steel Manufacturers from January to April in 2012 (Unit: ton)
Seen from Table 1 that the top three for bearing steel output from January to April in 2012 are still Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneng Steel, and the rankings of other steel mills do not change much (for Sha Steel, only the yield of Huai Steel counted). Zhongxin Special Steel that ranks the first are gradually approaching the level of the same period last year and have posed relatively large impact on the pick-up of production in bearing industry.
II. Performance of Domestic Bearing Steel Market in May:
(i) The export volume of bearing steel from January to April in 2012 continued to fall
According to the statistical data released by the ten major domestic bearing steel manufacturers, the export volume of bearing steel in April was 6,270 tons, 54 declined compared with the same period of last year, and the total export volume was from January to April only 25,453 tons. The export situation of the domestic bearing steel industry is really worrying.
Figure 2: Bearing Steel Export Situation in Major Domestic Special Steel Enterprises from 2011 to 2012
Data Resource: MRI
(ii) The bearing steel market experienced shock consolidation in May
In May, the prices in the bearing steel market firstly rose and then fell within a relatively smaller range. According to the statistical data released by China Steel Association, the national crude steel output reached a high level in May, the steel output greatly increased, and the delivery progress was fast, resulting in greater pressure on the spot market. As for traders, they mainly had many stocks but the turnover was gradually shrinking, so the relationship between supply and demand became unbalanced. The detailed situations of bearing steel market across the country in May are as follows:
The price range of bearing steel in Hangzhou market fluctuated and the market transactions was gradually shrinking. Up to the end of May, the average knock-down price of standard GCr15 continuous casting non-annealed steel was from 5,350 to 5,500 yuan/ton, and the average knock-down price of GCr15 die-casting annealed steel was between 7,600 and 7,700 yuan/ton.
Bearing steel prices in Luoyang market ran in the vulnerable consolidation state and the deal was light. Up to the end of May, the average knock-down price of standard GCr15 continuous casting non-annealed steel was from 5,600 to 5,750 yuan/ton, and the average knock-down price of GCr15 die-casting annealed steel was between 7,600 and 7,700.
Bearing steel prices in Xi'an market were basicly stable and the deal was commom. Up to the end of May, the spot goods of standard GCr15 continuous casting non-annealed steel was relatively insufficient, and the average knock-down price of GCr15 die-casting annealed steel was from 7,700 to 7,800 yuan/ton.
As for Chongqing and Chengdu markets, the prices became stable for temporary, and the turnover slightly slowed down. Up to the end of May, the average knock-down price of standard GCr15 continuous casting non-annealed steel was from 5950 to 6150 yuan/ton, and the average knock-down price of GCr15 die-casting annealed steel was around 7,600 yuan/ton.
Figure 3: Average Price Trend of Domestic Bearing Steel from 2011 to 2012
Data Resource: Mysteel
According to the statistics from Mysteeel.com: up to the end of May, 2012, the average price of GCr15 Φ50mm continuous casting non-annealed steel in China was 5,770 yuan/ton; the average price of GCr15 Φ100mm die-casting annealed steel was 8,100 yuan/ton. (some modifications applied to the statistical method)
Table 2: Summary of Sales Price of Major Bearing Steel Manufacturers in East China (standard continuous casting non-annealed steel bar) Unit: yuan
Table 2 shows that the bearing steel prices in East China rose slightly in May and the overall trend was "first rise and then fall", showing a certain increase compared with the beginning of the month.
III. Domestic Bearing Steel Market will Experience Vulnerable Consolidation:
1. Raw materials
The high-chrome prices dropped in May, and the quoted price at the end of the month was around 7900 yuan/ton, 150 yuan/ton fell compared with last month. Nowadays, steel mills rarely purchase reserving iron ores or other raw materials in advance, so the ore price is difficult to experience ups and downs, and the price of raw materials also has less impact to the steel market than before.
Figure 4: Average Price Trend of Domestic High Carbon Ferrochrome from 2011 to 2012
Data Resource: Mysteel
2. Steel Mills
Fron January to April, there was a return in the production of crude steel nationwide, and the crude steel production reached a high level in May. But few people would applause for this new high, as no data so far can prove that the level of demand in May also stand at the history high level, instead, people tend to feel that the overall demand this year is not so strong as in previous years. The concept of the traditional busy season has already been dispelled, the market practice has been repeatedly broken, the demand growth can not keep pace with that of capacity expansion, the pace of economic slows down, and the industry contradictions gradually arise.
3. Steel Market
In the first quarter of this year, China's economic growth has eased to 8.1%, which is the lowest growth rate in the past three years. The World Bank disclosed at its news conference for East Asia & Pacific Economic Update that China's GDP growth would fall from 8.4% in the first half of 2012 to 8.2%. In the first quarter and April, the situation in downstream industries of steel such as infrastructure construction, real estate, automotive, machinery, shipbuilding, etc. did not improved markedly. Compared with the same period last year, the growth rate of all main indicators obviously declined, wherein, the new construction and sales area of real estate, the completion amount of shipbuilding, the investment in railway construction and other indicators even showed negative growth year-on-year. The global economy continued to slow down, the decline in demand both home and abroad is the main reason for the new low in the growth rate of industrial added value in the April. Though the bearing steel market which has higher degree of dependence on the steel market environment failed to escape from the weak tendency, the level of downstream demand was not so bad, and the output of the supporting products of rolling bearings reached 5.966655700 billion sets in the first quarter, indicating significant increase compared with 4.6991868 billion sets in the same period last year.
4. Market Outlook
The Ministry of Railways made a loss of about 7 billion in the first quarter, and the debt ratio remained high, which blowed the market confidence which just recovered a little all at once. The total negative profit in the first quarter of last year was 3.76244 million yuan, compared with which, the loss in the first quarter of this year was almost twice that of last year. Due to the high-speed rail accident last year, 90% of the national railway projects in construction were shut down by the end of last year, the sizeable "ice blockage" led the domestic rail development to fall at the lowest point in recent years. Entering in May 2012, the National Development and Reform Commission has speeded up the project approval. Although many projects in the downstream industries including the railways, highways, infrastructure construction and new energy industries recently received many approvals, it still takes time for them to have the practical effect to the market, and the steel market economy may have to realize overall recovery in the period of July to August which is also the opportunity for the traditional off-season of the steel market to drop away. It is expected that the bearing steel market will operate in the vulnerable consolidation state, and the current steel prices were relatively low, which indicates limited dropping space.
(CBCC)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
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