Bearing steel price to stabilise after hit the bottom in August
Resource from: CBCC Likes:115
Aug 20,2015
Overview
From January to Jun, the output of crude steel decreased by 7.78% % year on year, the output of bearing steel decreased by 9.92% year on year, and the exports fell down by 11.12%.
With the arrival of the traditional sales off-season, the market situation was not optimistic in July, in fact, basically in a weak state. Traders reported poor performance in trading as well as less arrangement of shipment. Although the price of common wire steel rose slightly, it is still not enough to wire steel the price of bearing steel.
As for the bearing steel market trend in August, the majority of companies expected it to stabilize, for reasons that the supply and demand relations may be improved due to the wide range of business losses among steel companies and environmental pressures that suppress the increase in output. Besides, the social steel inventory and steel mill inventory both decreased, so the market price is less likely to continue falling.
I. Bearing Steel Markets
1. Output
(i) The YOY output of crude steel and bearing steel increased
According to the statistics of Special Steel Association, from January to June 2015, the output of bearing crude steel reported by domestic major steel companies was 1.306 million tons, decreased by 7.78% over the same period last year; in the same period, the steel output of domestic major steel companies was 1.2572 million tons, decreased by 9.92% over the same period last year, but the growth slowed. For details, see Figure 1:
(ii) The output of finished steel from January to June 2015: either increase or decrease in output
Seen from Table 1 that the top three for bearing steel output from January to Junee 2015 are still Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneeng Steel. (for Sha Steel, only the yield of Huai Steel is counted). Among these 23 companies, the crude bearing steel ouput of 7 companies rose while 13 fell, 2 out of production.
2. Export: export fell slightly in June
Domestic bearing steel export was 102,876 tons in June, decreased by 34.65% YoY, increased by 5.31% MoM. Total export in the first six month was 57,534 tons, representing a reduction of 11.12% over the same period last year. The export volume of bearing steel has been greatly affected by the continued downturn in the international steel market.
3. Mainstream price policy in July: decline in the range of 100-200 yuan/ton
II. Relevant Markets
1. Raw materials market still in low-price operation
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
According to the statistical analysis of China Association of Automobile Manufacturers, motorcycle sales rose YoY but fell MoM in June 2015; in the first half, the output and sales of motorcycles ran smoothly, totaling 9.5419 million and 9.5979 million respectively, down by 8.02% and 7.88% YoY. In June, the output and sales of motorcycle was 1,662,100 and 1,684,500 respectively, up by 2.17% and 2.43% MoM, down by 8.84% and 8.72%. In the first half, the output and sales rate in the motorcycles industry was 100.59%, representing a 0.15 percentage points increase over the previous year.
2. Downstream markets
(i) Rolling Bearings
According to the data from China Machinery Industry Association, the output of rolling bearings in June was 1,706,120,000 units, 1,517,060,000 in April, representing an increase of 12.46 percent over the same period last month.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, motorcycle sales rose YoY but fell MoM in June 2015; in the first half, the output and sales of motorcycles ran smoothly, totaling 9.5419 million and 9.5979 million respectively, down by 8.02% and 7.88% YoY. In June, the output and sales of motorcycle was 1,662,100 and 1,684,500 respectively, up by 2.17% and 2.43% MoM, down by 8.84% and 8.72%. In the first half, the output and sales rate in the motorcycles industry was 100.59%, representing a 0.15 percentage points increase over the previous year.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, , in June 2015, automobile production and sales were down year on year following the decline in May; wherein the monthly output and sales of passenger cars both fell YoY for the first time (months with holidays excluded) since December 2008, while the monthly output and sales of commercial vehicles increased slightly. In the first half, the growth rate of automobile output and sales both dropped significantly over the previous year. In June, 1,850,800 automobiles were produced, with a decline of 5.77% MoM, 0.22% YoY; 1,803,100 automobiles were sold, with a decline of 5.29% MoM, 2.31% YoY.
In the first half, the output and sales of automobiles was 12,095,000 and 11,850,300 respectively, with an increase of 2.64% and 1.43% YoY, 6.96 percentage points and 6.93 percentage points higher than the previous year.
III. Conclusions
Currently, bearing steel market continued to weaken while emerging economies were not good, either. There are no signs of recovery in the automotive, machinery and other downstream industries for the lack of improvement in market demands. Although the price of common wire steel rose slightly in July, it is still not enough to wire steel the price of bearing steel. Instead, most mills cut the price down by 100-200 yuan/ton, mainly due to the slow release in demand, which prevents rebound in price.
However, as demand gradually released, steel inventory pressure will decrease, coupled with the stimulation of recent rise in common wire steel, bearing steel market may gradually become warm. On the whole, although the social steel inventory and steel mill inventory are both declining, August is still the consumer off-season. The demand of end customers remained weak, the price of bearing steel is less likely to rise in short term. Therefore, the bearing steel price is expected to stabilise after hit the bottom in August.
(ii) The output of finished steel from January to June 2015: either increase or decrease in output
Seen from Table 1 that the top three for bearing steel output from January to Junee 2015 are still Zhongxin Special Steel (Xinye Steel and Xingcheng Special Steel), Dongbei Speical Steel and Juneeng Steel. (for Sha Steel, only the yield of Huai Steel is counted). Among these 23 companies, the crude bearing steel ouput of 7 companies rose while 13 fell, 2 out of production.
2. Export: export fell slightly in June
Domestic bearing steel export was 102,876 tons in June, decreased by 34.65% YoY, increased by 5.31% MoM. Total export in the first six month was 57,534 tons, representing a reduction of 11.12% over the same period last year. The export volume of bearing steel has been greatly affected by the continued downturn in the international steel market.
3. Mainstream price policy in July: decline in the range of 100-200 yuan/ton
II. Relevant Markets
1. Raw materials market still in low-price operation
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
According to the statistical analysis of China Association of Automobile Manufacturers, motorcycle sales rose YoY but fell MoM in June 2015; in the first half, the output and sales of motorcycles ran smoothly, totaling 9.5419 million and 9.5979 million respectively, down by 8.02% and 7.88% YoY. In June, the output and sales of motorcycle was 1,662,100 and 1,684,500 respectively, up by 2.17% and 2.43% MoM, down by 8.84% and 8.72%. In the first half, the output and sales rate in the motorcycles industry was 100.59%, representing a 0.15 percentage points increase over the previous year.
2. Downstream markets
(i) Rolling Bearings
According to the data from China Machinery Industry Association, the output of rolling bearings in June was 1,706,120,000 units, 1,517,060,000 in April, representing an increase of 12.46 percent over the same period last month.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, motorcycle sales rose YoY but fell MoM in June 2015; in the first half, the output and sales of motorcycles ran smoothly, totaling 9.5419 million and 9.5979 million respectively, down by 8.02% and 7.88% YoY. In June, the output and sales of motorcycle was 1,662,100 and 1,684,500 respectively, up by 2.17% and 2.43% MoM, down by 8.84% and 8.72%. In the first half, the output and sales rate in the motorcycles industry was 100.59%, representing a 0.15 percentage points increase over the previous year.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, , in June 2015, automobile production and sales were down year on year following the decline in May; wherein the monthly output and sales of passenger cars both fell YoY for the first time (months with holidays excluded) since December 2008, while the monthly output and sales of commercial vehicles increased slightly. In the first half, the growth rate of automobile output and sales both dropped significantly over the previous year. In June, 1,850,800 automobiles were produced, with a decline of 5.77% MoM, 0.22% YoY; 1,803,100 automobiles were sold, with a decline of 5.29% MoM, 2.31% YoY.
In the first half, the output and sales of automobiles was 12,095,000 and 11,850,300 respectively, with an increase of 2.64% and 1.43% YoY, 6.96 percentage points and 6.93 percentage points higher than the previous year.
III. Conclusions
Currently, bearing steel market continued to weaken while emerging economies were not good, either. There are no signs of recovery in the automotive, machinery and other downstream industries for the lack of improvement in market demands. Although the price of common wire steel rose slightly in July, it is still not enough to wire steel the price of bearing steel. Instead, most mills cut the price down by 100-200 yuan/ton, mainly due to the slow release in demand, which prevents rebound in price.
However, as demand gradually released, steel inventory pressure will decrease, coupled with the stimulation of recent rise in common wire steel, bearing steel market may gradually become warm. On the whole, although the social steel inventory and steel mill inventory are both declining, August is still the consumer off-season. The demand of end customers remained weak, the price of bearing steel is less likely to rise in short term. Therefore, the bearing steel price is expected to stabilise after hit the bottom in August.
(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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