Bearing steel price to consolidate in tight ranges in September
Resource from: CBCC Likes:114
Sep 25,2015
Overview
From January to July, the output of crude steel decreased by 5.47% year on year, the output of bearing steel decreased by 6.33% year on year, and the exports fell down by 17.89% year on year. Bearing steel market was weak in August, thinly traded, and with no improvement in the psychological level. Sales in the end-user market was normal. Steel mills behaved cautiously and mainly scheduled production according to orders and control capital flows as end-users are not very positive in bearing steel procurement. In general, though the demand usually go steady in the coming golden September, the situation may not be greatly improved due to the effect of the down trend of the special steel and other steels. Slight adjustment is expected to see in bearing steel price, but the adjustment range will be limited because of the cost of support.
I. Bearing Steel Markets
1. Output
(i) The YOY outputs of crude steel and bearing steel both decreased from January to July
According to the statistics of Special Steel Association, from January to July 2015, the output of bearing crude steel reported by domestic major steel companies was 1.6374 million tons, decreased by 5.47% over the same period last year; in the same period, the steel output of domestic major steel companies was 1.5704 million tons, decreased by 6.33% 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 July 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 14 fell, 2 out of production.
2. Export: export fell slightly in July
Domestic bearing steel export was 123,480 tons in July, decreased by 17.89% YoY but increased by 20.03% MoM. Total export in the first seven months was 69,882 tons, representing a reduction of 12.40 over the same period last year.
In July, Xingcheng Specialsteel reported the largest export volume of bearing steel, 9866 tons, accounting for the vast majority of bearing steel exports.
3. Mainstream price policy in August: some steel mills cut the price, mainly in the range of 100-200 yuan/ton
II. Relevant Markets
1. Raw materials market
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Imported ore market was volatile in August, with price floating between 55-57 dollars, closed at 56.5 dollar/dry metric ton by the end of the month; Carbon steel scrap market remained depressed, closed at 1177 yuan/ton by the end of the month, down by 3.88% over the previous month; high carbon ferrochrome market was also in the weak trend, closed at 6203 yuan/ton by the end of the month. Since the end user demand was improving but with no significant improvement, raw materials market is expected to remain in larger pressure in September, with possible weak adjustment.
2. Downstream markets
(i) Rolling Bearings
According to the data from China Machinery Industry Association, the output of rolling bearings in July was 1.56444 billion units, 1.70612 billion in June, fell by 12.46 percent over the same period last month.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, market demand was weak in July due to the hot weather, and some manufacturers even shut down to avoid any risk that may be caused by high temperature working. For this reason, the output and sales of motorcycles both fell sharply, totaling more than 10 million units for each, with the YoY decline growing slightly. In July, the output and sales of motorcycle was 1,555,200 and 1,530,000 respectively, down by 6.43% and 9.17% MoM, and 10.19% and 10.22% YoY. From January to July, the industry sales totaled 11,097,100 and 11,128,000 units, down by 8.33% and 8.21%YoY, and the decline increased by 0.31 and 0.33 percentage points over June. In the first 7 months, the output and sales rate in the motorcycles industry was 100.28%, representing a 0.12 percentage points increase over the previous year.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, in July 2015, automobile production and sales kept falling, and the decline range was beyond estimation. Wherein the MoM output and sales had been declined for four consecutive months since April, while the YoY output and sales fell for three consecutive months since May.The growth rates of automobile output and sales were both below 1% from January to July, lower than the previous six months. In this period, 13.6127 million automobiles were produced, 13.3533 million of which were sold, and the output and sales YoY growths were 0.80% and 0.39% respectively. Wherein, the output and sales of passenger car were 11,629,000 and 11,364,200 units respectively, up by 4.01% and 3.39%; the output and sales of commercial vehicles were 1,983,700 and 1,989,100 units respectively, down by 14.62% and 13.91%.
III. Conclusions
Currently, no signs of improvements have been seen on the macroeconomic front, nor good policies. Downstream business demand was very sluggish, so the inventory of automobiles and household appliances remained large. The performance in engineering machinery industry was also unsatisfactory. Bearing steel market was in the doldrums in August, and traders made less shipment, which weakened the market confidence. The oversupply problem may not ease later. Downstream demands can not have a substantial rebound in the short term, so the bearing steel price is unlikely to rise in near future.
Market demand will not release substantially in a short time until the entire steel market gets warm. Therefore, in September, bearing steel market is expected to remain in weak consolidations, with some adjustments in market price.
(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 July 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 14 fell, 2 out of production.
2. Export: export fell slightly in July
Domestic bearing steel export was 123,480 tons in July, decreased by 17.89% YoY but increased by 20.03% MoM. Total export in the first seven months was 69,882 tons, representing a reduction of 12.40 over the same period last year.
In July, Xingcheng Specialsteel reported the largest export volume of bearing steel, 9866 tons, accounting for the vast majority of bearing steel exports.
3. Mainstream price policy in August: some steel mills cut the price, mainly in the range of 100-200 yuan/ton
II. Relevant Markets
1. Raw materials market
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Imported ore market was volatile in August, with price floating between 55-57 dollars, closed at 56.5 dollar/dry metric ton by the end of the month; Carbon steel scrap market remained depressed, closed at 1177 yuan/ton by the end of the month, down by 3.88% over the previous month; high carbon ferrochrome market was also in the weak trend, closed at 6203 yuan/ton by the end of the month. Since the end user demand was improving but with no significant improvement, raw materials market is expected to remain in larger pressure in September, with possible weak adjustment.
2. Downstream markets
(i) Rolling Bearings
According to the data from China Machinery Industry Association, the output of rolling bearings in July was 1.56444 billion units, 1.70612 billion in June, fell by 12.46 percent over the same period last month.
(ii) Motorcycles
According to the statistical analysis of China Association of Automobile Manufacturers, market demand was weak in July due to the hot weather, and some manufacturers even shut down to avoid any risk that may be caused by high temperature working. For this reason, the output and sales of motorcycles both fell sharply, totaling more than 10 million units for each, with the YoY decline growing slightly. In July, the output and sales of motorcycle was 1,555,200 and 1,530,000 respectively, down by 6.43% and 9.17% MoM, and 10.19% and 10.22% YoY. From January to July, the industry sales totaled 11,097,100 and 11,128,000 units, down by 8.33% and 8.21%YoY, and the decline increased by 0.31 and 0.33 percentage points over June. In the first 7 months, the output and sales rate in the motorcycles industry was 100.28%, representing a 0.12 percentage points increase over the previous year.
(iii) Automobiles
According to the statistical analysis of China Association of Automobile Manufacturers, in July 2015, automobile production and sales kept falling, and the decline range was beyond estimation. Wherein the MoM output and sales had been declined for four consecutive months since April, while the YoY output and sales fell for three consecutive months since May.The growth rates of automobile output and sales were both below 1% from January to July, lower than the previous six months. In this period, 13.6127 million automobiles were produced, 13.3533 million of which were sold, and the output and sales YoY growths were 0.80% and 0.39% respectively. Wherein, the output and sales of passenger car were 11,629,000 and 11,364,200 units respectively, up by 4.01% and 3.39%; the output and sales of commercial vehicles were 1,983,700 and 1,989,100 units respectively, down by 14.62% and 13.91%.
III. Conclusions
Currently, no signs of improvements have been seen on the macroeconomic front, nor good policies. Downstream business demand was very sluggish, so the inventory of automobiles and household appliances remained large. The performance in engineering machinery industry was also unsatisfactory. Bearing steel market was in the doldrums in August, and traders made less shipment, which weakened the market confidence. The oversupply problem may not ease later. Downstream demands can not have a substantial rebound in the short term, so the bearing steel price is unlikely to rise in near future.
Market demand will not release substantially in a short time until the entire steel market gets warm. Therefore, in September, bearing steel market is expected to remain in weak consolidations, with some adjustments in market price.
(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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