Bearing steel market will run in weak consolidation in January
Resource from: CBCC Likes:140
Feb 27,2015
This month, the price of bearing steel continued to dip, mainly down by 50-80 yuan/ton. Up to now, the price of low-end continuous non-annealed casting material is around 3200 yuan/ton (accepted); mid-range materials 3300 yuan/ton (accepted); high-end materials 4300 yuan/ton (accepted); forgings 5800 yuan/ton (accepted).
There are two view points on the domestic bearing steel trend in January 2015. Those who pay more attention to raw materials believe that the prices of raw materials represented by ore and steel billet are unlikely to decline due to the in the short-term stable performance, which will help stabilize the price of bearing steel. However, those who care more about downstream customers are more pessimistic and mainly believe that the poor downstream demand and financial pressures will result in further decline in bearing steel prices by 50 yuan/ton in January. Overall, the bearing steel market will run in weak consolidation in January.
I. Bearing Steel Markets
1. Output
(i) In November, the output of crude steel and bearing steel continued to decline year on year
According to the statistics of Special Steel Association, from January to November 2014, the bearing crude steel output of domestic major steel companies was 2.7063 million tons, with a 2.24% decrease over the same period last year; in the same period, the steel output of domestic major steel companies was 2.6402 million tons, showing a decrease of 2.34% over the same period last year. Wherein, monthly production of bearing crude steel in November was 218,400 tons; steel production was 211,700 tons. For details, see Figure 1:
(ii) Production scheduling in January: slight drop in output
According to a survey on 33 domestic bearing steel production enterprises, the total output of bearing steel in January is estimated at 256,300 tons. Details seen in the table below:
According to the survey, only one of the above 33 steel mills planed a 28-day furnace maintenance, affecting a yield loss of 65,000 tons, the others have no maintenance plans. Meanwhile, as the majority of steel mills make no profits from bearing steel, and the current price is unlikely to fall further, they mainly preferred to drop production.
2. Export: exports volume dropped significantly in November
The export volume of steel bearing in November was 8,491 tons, up by 4.29 YoY, and down by 7.96 MoM. From January to November, the total volume of steel bearing was 124,299 tons, representing an increase of 12.21%.
3. Bearing steel price in December: dropped by 50-80 yuan/ton
Bearing steel markets continued the depressed state in December, so market turnover was also light. Steel mills cut the ex-factory price by nearly 50-80 yuan/ton.
II. Relevant Markets
1. Raw materials market still in the low-price operation
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Although the imported ore index rebounded slightly in December, the whole month average price still fell by 5.86 % over the previous month; the price of carbon steel scrap continued to fall, and the whole month average price fell by 4.38 % over the previous month; the price of high carbon ferrochrome continued consolidation at the bottom, about 6611 yuan/ton. It is predicted that raw material prices has limited space to fall in January.
2. Downstream markets
(i) Rolling bearings
The output of rolling bearings was 1,691,514,000 sets in November, decreased by 85,392,000 units compared with October, up by 5.3%. The total output of bearings was 16,679,779,600 sets from January to October, 2014.
(ii) Crop harvesting machinery
The output of crop harvest machinery was 71,995 sets in November, decreased by 817 sets compared with October, increased by 1.15% MoM. The total output of the same was 690,162 sets from January to November, 2014.
(iii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of motorcycles both increased MoM in November 2014; from January to November, the whole industry sales totaled 19,273,700 sets, with the decline narrowed further YoY.
(iv) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of automobiles was generally stable in November 2014,increased MoM. From January to November, the increase in the output and sales of automobiles showed a slight decline over the first 10 months.
The above data showed that the downstream industry was still in the vulnerable situation.
III. Conclusions
1. The prices of raw materials represented by iron ores were in low consolidation in January;
2. Downstream demand was still poor, so steel mills received fewer orders;
3. There arose the demand for the funds return as traders were facing funding constraints;
Bearing steel market is expected to run in weak consolidation in January 2015. Some steel mills may cut price by 50 yuan/ton.
(ii) Production scheduling in January: slight drop in output
According to a survey on 33 domestic bearing steel production enterprises, the total output of bearing steel in January is estimated at 256,300 tons. Details seen in the table below:
According to the survey, only one of the above 33 steel mills planed a 28-day furnace maintenance, affecting a yield loss of 65,000 tons, the others have no maintenance plans. Meanwhile, as the majority of steel mills make no profits from bearing steel, and the current price is unlikely to fall further, they mainly preferred to drop production.
2. Export: exports volume dropped significantly in November
The export volume of steel bearing in November was 8,491 tons, up by 4.29 YoY, and down by 7.96 MoM. From January to November, the total volume of steel bearing was 124,299 tons, representing an increase of 12.21%.
3. Bearing steel price in December: dropped by 50-80 yuan/ton
Bearing steel markets continued the depressed state in December, so market turnover was also light. Steel mills cut the ex-factory price by nearly 50-80 yuan/ton.
II. Relevant Markets
1. Raw materials market still in the low-price operation
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Although the imported ore index rebounded slightly in December, the whole month average price still fell by 5.86 % over the previous month; the price of carbon steel scrap continued to fall, and the whole month average price fell by 4.38 % over the previous month; the price of high carbon ferrochrome continued consolidation at the bottom, about 6611 yuan/ton. It is predicted that raw material prices has limited space to fall in January.
2. Downstream markets
(i) Rolling bearings
The output of rolling bearings was 1,691,514,000 sets in November, decreased by 85,392,000 units compared with October, up by 5.3%. The total output of bearings was 16,679,779,600 sets from January to October, 2014.
(ii) Crop harvesting machinery
The output of crop harvest machinery was 71,995 sets in November, decreased by 817 sets compared with October, increased by 1.15% MoM. The total output of the same was 690,162 sets from January to November, 2014.
(iii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of motorcycles both increased MoM in November 2014; from January to November, the whole industry sales totaled 19,273,700 sets, with the decline narrowed further YoY.
(iv) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of automobiles was generally stable in November 2014,increased MoM. From January to November, the increase in the output and sales of automobiles showed a slight decline over the first 10 months.
The above data showed that the downstream industry was still in the vulnerable situation.
III. Conclusions
1. The prices of raw materials represented by iron ores were in low consolidation in January;
2. Downstream demand was still poor, so steel mills received fewer orders;
3. There arose the demand for the funds return as traders were facing funding constraints;
Bearing steel market is expected to run in weak consolidation in January 2015. Some steel mills may cut price by 50 yuan/ton.
(CBCC)
【CBCC News Statement】
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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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