Bearing steel market will stablize in January
Resource from: CBCC Likes:114
Feb 23,2016
Overview
From January to November, the output of crude steel decreased by 10.49% year on year, the output of bearing steel decreased by 13.16% year on year, and the exports rose by 5.63% year on year. The bearing steel market was in the first low then high trend in December, and the downstream demand remained weak. Up to now, the price of low-grade continuous casting non-annealed steel was 2300 yuan/ton; the price of medium-grade resources was 2600 yuan/ton; the price of high-end resources was 4000 yuan/ton; the price of forgings was 5400 yuan/ton. Although the rise in prices of building materials and related products in the second half of December kind of supported the price of bearing steel, it failed to stimulate the bearing steel market to rebound. Most steel enterprises now run at a loss and have to cut output due to the environmental pressure. The steel enterprise stocks and social stocks are both declining, so the bearing steel price is unlikely to fall further.
However, the performance of mechanical, automotive & boats and other downstream industries turned out to be unsatisfactory, resulting in inadequate rising power of bearing steel price. Based on all these, the bearing steel market is more likely to stablize in January.
I. Bearing Steel Market
According to the statistics of Special Steel Association, from January to November in 2015, the output of bearing crude steel reported by domestic major steel companies was 2.3911 million tons, decreased by 10.49% over the same period last year; in the same period, the steel output of domestic major steel companies was 2.2564 million tons, decreased by 13.16% over the same period last year. For details, see Figure 1:
Seen from Table 1 that the top three for bearing steel output from January to November 2015 are still 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 22 companies, only one reported increase in the crude bearing steel ouput, while 19 companies fell, 2 out of production.
II. Market Performance
1. Export: export fell slightly YoY from January to November
According to the statistics from domestic 10 major bearing steel production enterprises: Domestic bearing steel export was 122,150 tons in November, increased by 43.86% YoY while decreased by 5.94% MoM. Total export volume in the later eleven months was 117,300 tons, representing a reduction of 5.63% over the same period last year. In November, Xingcheng Special Steel reported the largest export volume of bearing steel, 12,011 tons, accounting for the vast majority of bearing steel exports.
2. Bearing steel market became strong after being weak previously in December
Domestic bearing steel price was weak in the first half of December, though became strong in the second half. There was no significant improvement in market performance, the same with the order quantity of downstream business. Traders had less shipment. The majority of market participants were in pessimistic attitude.
Money is always tight before the Spring Festival holiday. With demand for return of funds and lack of upward momentum, the bearing steel price is expected to stabilize in January.
III. Relevant Markets
1. Raw materials market
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Imported ore price raised first then fell in December, closed at 42 dollar per dry metric ton at the end of the month; Carbon steel scrap price rebounded slightly after falling, closed at 916 yuan/ton by the end of the month, down by 8.49% over the previous month; high carbon ferrochrome prices kept falling, closed at 5667 yuan/ton by the end of the month. Combined with the current supply and demand situation, raw material price is more likely to stay in consolidation operation in January due to the higher resistance.
2. Downstream market
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of automobiles continued the upward trend last month in November, with rapid growth both YoY and MoM. The output and sales both exceeded 2.5 million, breaking a new record. The output and sales growth from January to November slightly increased compared with the previous ten months.
IV. Conclusions
The bearing steel market was in the first low then high trend in December, and the downstream demand remained weak. Steel mills had less orders as traders were cautious about stocking. As money is tight before the Spring Festival holiday, coupled with demand for return of funds and lack of upward momentum, the bearing steel price is expected to stabilized in January. Due to the weak demand in mechanical, travel and other downstream industries and oversize production capacity, the contradiction of supply and demand is very prominent in the steel market, and the competition among enterprises further intensified, especially the homogeneous competition. At present, as most bearing steel mills are at a loss or marginal cost, the possibility of further declines is small. However, considering the overall poor downstream demand according to bearing manufacturers, the upward momentum for bearing steel price is also inadequate.
In summary, the bearing steel price is expected to stabilized in January, with little possibility for price changes.
Seen from Table 1 that the top three for bearing steel output from January to November 2015 are still 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 22 companies, only one reported increase in the crude bearing steel ouput, while 19 companies fell, 2 out of production.
II. Market Performance
1. Export: export fell slightly YoY from January to November
According to the statistics from domestic 10 major bearing steel production enterprises: Domestic bearing steel export was 122,150 tons in November, increased by 43.86% YoY while decreased by 5.94% MoM. Total export volume in the later eleven months was 117,300 tons, representing a reduction of 5.63% over the same period last year. In November, Xingcheng Special Steel reported the largest export volume of bearing steel, 12,011 tons, accounting for the vast majority of bearing steel exports.
2. Bearing steel market became strong after being weak previously in December
Domestic bearing steel price was weak in the first half of December, though became strong in the second half. There was no significant improvement in market performance, the same with the order quantity of downstream business. Traders had less shipment. The majority of market participants were in pessimistic attitude.
Money is always tight before the Spring Festival holiday. With demand for return of funds and lack of upward momentum, the bearing steel price is expected to stabilize in January.
III. Relevant Markets
1. Raw materials market
(i) Iron ore
(ii) Steel scrap
(iii) High carbon ferro-chrome
Imported ore price raised first then fell in December, closed at 42 dollar per dry metric ton at the end of the month; Carbon steel scrap price rebounded slightly after falling, closed at 916 yuan/ton by the end of the month, down by 8.49% over the previous month; high carbon ferrochrome prices kept falling, closed at 5667 yuan/ton by the end of the month. Combined with the current supply and demand situation, raw material price is more likely to stay in consolidation operation in January due to the higher resistance.
2. Downstream market
According to the statistical analysis of China Association of Automobile Manufacturers, the output and sales of automobiles continued the upward trend last month in November, with rapid growth both YoY and MoM. The output and sales both exceeded 2.5 million, breaking a new record. The output and sales growth from January to November slightly increased compared with the previous ten months.
IV. Conclusions
The bearing steel market was in the first low then high trend in December, and the downstream demand remained weak. Steel mills had less orders as traders were cautious about stocking. As money is tight before the Spring Festival holiday, coupled with demand for return of funds and lack of upward momentum, the bearing steel price is expected to stabilized in January. Due to the weak demand in mechanical, travel and other downstream industries and oversize production capacity, the contradiction of supply and demand is very prominent in the steel market, and the competition among enterprises further intensified, especially the homogeneous competition. At present, as most bearing steel mills are at a loss or marginal cost, the possibility of further declines is small. However, considering the overall poor downstream demand according to bearing manufacturers, the upward momentum for bearing steel price is also inadequate.
In summary, the bearing steel price is expected to stabilized in January, with little possibility for price changes.
(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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