Bearing steel market to stabilize and resume an upward trend in April
Resource from: CBCC Likes:131
Apr 14,2015
Overview
From January to February, the crude steel production increased by 2.34 % year on year, the bearing steel production increased by 3.91%, and the exports fell by 4.4%. In terms of price, bearing steel prices hovered at the bottom in March. As for bearing steel trend in April, most companies expected the price to stabilize due to the improved supply and demand balance thanks to the increase restriction in steel output resulted by heavy losses of steel enterprises and environmental pressures. Besides, downstream demand will also be improved as steel social inventory and mills inventory are both declining. Hence it is expected that the market price is expected to stabilize and resume an upward trend in April.
I. Bearing Steel Markets
1. Output
(i) The YOY growth of crude steel and bearing steel slowed
According to the statistics of Special Steel Association, from January to February 2015, the bearing crude steel output of domestic major steel companies was 0.4774 million tons, increased by 2.34% over the same period last year; in the same period, the steel output of domestic major steel companies was 0.4619 million tons, increased by 3.91% over the same period last year, but the growth slowed. For details, see Figure 1:
(ii) Production scheduling in March: increase or decrease in output
According to a survey on 33 domestic bearing steel production enterprises, the total output of bearing steel in February is estimated at 250,300 tons. Details seen in the table below:
Seen from Table 1 that the top three for bearing steel output from January to March in 2014 are Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneng Steel. (for Sha Steel, only the yield of Huai Steel is counted). Among these 21 companies, the crude bearing steel ouput of 11 companies rose while 10 fell.
2. Export: export rose slightly in February
Domestic bearing steel export was 8471 tons in February, decreased by 13.3% YoY, increased by 5.8% MoM. Total export in January-February was 16,477 tons, representing a reduction of 23.52% over the same period last year.
3. Mainstream price policy in March: decline in the range of 50-120 yuan/ton
Demand continued to be depressed in March. Market turnover was relatively light. Steel mills cut their price by nearly 50-120 yuan ton, most of which expected the price to rise as it was already at the bottom.
II. Relevant Markets
1. Raw materials market still in low-price operation
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Import ore index continued to decline in March, currently arriving at $48.75; The price of carbon steel scrap continued to fall, and the monthly average price fell by 3.81% over the previous month; the price of high carbon ferrochrome hit the bottom in consolidation state, around 6593 yuan/ton. It is predicted that raw material prices will fall in limited space in April.
2. Downstream markets
(i) Machinery Industry
According to the data from China Machinery Industry Association, from January to February 2015, the output of compaction machinery was 6313 units, down by 12%, and the growth rate turned from positive to negative; the output of concrete machinery 50,600 units, down by 30.8%, and the decline expanded by 28.8 % compared with full year of 2014.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of motorcycles both decreased MoM in February 2015; the output and sales were 2,938,600 sets and 2,972,900 sets.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, in February 2015, the output and sales of automobiles decreased sharply compared with last month but remained slightly YoY. From January to February, the output and sales of automobiles both showed a steady growth. Passenger vehicles had a lower growth rate over the previous year, while commercial vehicles showed a big decline. In the same period, the output and sales of automobiles was respectively 3,919,100 units and 3,912,900 units, with an increase of 6.22% and 4.25% accordingly.
III. Conclusions
Based on the current situation, though the raw material prices are still showing a downward trend, the decline has been narrowed from the previous month. On the other hand, the pressure from environmental protection further suppresses the output, easing the supply and demand relationship, thus paves the way for the steel market uplink. April is the traditional peak demand season, so improved turnover is possible to occur.
(ii) Production scheduling in March: increase or decrease in output
According to a survey on 33 domestic bearing steel production enterprises, the total output of bearing steel in February is estimated at 250,300 tons. Details seen in the table below:
Seen from Table 1 that the top three for bearing steel output from January to March in 2014 are Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneng Steel. (for Sha Steel, only the yield of Huai Steel is counted). Among these 21 companies, the crude bearing steel ouput of 11 companies rose while 10 fell.
2. Export: export rose slightly in February
Domestic bearing steel export was 8471 tons in February, decreased by 13.3% YoY, increased by 5.8% MoM. Total export in January-February was 16,477 tons, representing a reduction of 23.52% over the same period last year.
3. Mainstream price policy in March: decline in the range of 50-120 yuan/ton
Demand continued to be depressed in March. Market turnover was relatively light. Steel mills cut their price by nearly 50-120 yuan ton, most of which expected the price to rise as it was already at the bottom.
II. Relevant Markets
1. Raw materials market still in low-price operation
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Import ore index continued to decline in March, currently arriving at $48.75; The price of carbon steel scrap continued to fall, and the monthly average price fell by 3.81% over the previous month; the price of high carbon ferrochrome hit the bottom in consolidation state, around 6593 yuan/ton. It is predicted that raw material prices will fall in limited space in April.
2. Downstream markets
(i) Machinery Industry
According to the data from China Machinery Industry Association, from January to February 2015, the output of compaction machinery was 6313 units, down by 12%, and the growth rate turned from positive to negative; the output of concrete machinery 50,600 units, down by 30.8%, and the decline expanded by 28.8 % compared with full year of 2014.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of motorcycles both decreased MoM in February 2015; the output and sales were 2,938,600 sets and 2,972,900 sets.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, in February 2015, the output and sales of automobiles decreased sharply compared with last month but remained slightly YoY. From January to February, the output and sales of automobiles both showed a steady growth. Passenger vehicles had a lower growth rate over the previous year, while commercial vehicles showed a big decline. In the same period, the output and sales of automobiles was respectively 3,919,100 units and 3,912,900 units, with an increase of 6.22% and 4.25% accordingly.
III. Conclusions
Based on the current situation, though the raw material prices are still showing a downward trend, the decline has been narrowed from the previous month. On the other hand, the pressure from environmental protection further suppresses the output, easing the supply and demand relationship, thus paves the way for the steel market uplink. April is the traditional peak demand season, so improved turnover is possible to occur.
(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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