Bearing steel price will rise on a stable basis in February
Resource from: CBCC Likes:123
Feb 29,2016
Overview
From January to December, the output of crude steel decreased by 12.11% year on year, the output of bearing steel decreased by 15.20% year on year, and the exports rose by 3.57% year on year. Bearing steel price remained strong in January. Individual steel mills had relative good performance in orders. 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. As the "New Year" is approaching, downstream users will complete the stocking, so the market demand will be further reduced. However, some steel mills have been performing well in receiving orders recently, and others stopped production for overhaul in January, creating conditions for price increase of bearing steel. Bearing steel price is more likely to go up than fall down in February, with the whole market running in a consolidation state.
I. Bearing Steel Markets
According to the statistics of Special Steel Association, from January to December in 2015, the output of bearing crude steel reported by domestic major steel companies was 2.5833 million tons, decreased by 12.11% over the same period last year; in the same period, the steel output of domestic major steel companies was 2.4266 million tons, decreased by 15.20% 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 December 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 December
According to the statistics from domestic 10 major bearing steel production enterprises: Domestic bearing steel export was 129,250 tons in December, increased by 20.34% YoY while decreased by 5.81% MoM. Total export volume from January to December was 130,225 tons, representing a reduction of 3.57% over the same period last year. In December, Xingcheng Special Steel reported the largest export volume of bearing steel, 11,250 tons, accounting for the vast majority of bearing steel exports.
2. Bearing steel market stayed strong in January
Domestic bearing steel market price remained strong in January, poorly traded. Individual mills had good performance in orders, raising some confidence for price rising in laterperiod. Some mills will stop production for overhaul before the Spring Festival, which may result in reduction of resources release. Seen from the current trend in bearing steel market, stability will be the main tone in February. The price is more likely to rise rather than going down if there is no significant change in the macro side.
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, with rapid growth YoY and MoM for three consecutive months. The output and sales both exceeded 2.6 million, breaking a new record.
IV. Conclusions
Bearing steel price remained strong in January, with the turnover to be released. Near the year end, the demand of downstream end users is weak. The sales condition is difficult to change in any way of efforts. The market even fails to give a good response to price-cuting activities carried out by various steel mills.
As the Spring Festival is in February, all downstream users will have some stock before the time. Many steel mills will not start production after the Festival, so the entire demand in February will not be very good. However, individual steel mills have good performance in orders, which may push the price to go up in later period. For example, Xingcheng Special Steel has been at full capacity for continuous orders for three consecutive months, with the price staying in the rising trend in the range of about 100 yuan/ton. Besides, some mills will stop production for overhaul before the Spring Festival, which may result in reduction of resources release, thus creating conditions for price rising. Taken together, bearing steel price is expected to rise in February driven by the price push of steel mills, particular in late February, but the increase will not be great.
Seen from Table 1 that the top three for bearing steel output from January to December 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 December
According to the statistics from domestic 10 major bearing steel production enterprises: Domestic bearing steel export was 129,250 tons in December, increased by 20.34% YoY while decreased by 5.81% MoM. Total export volume from January to December was 130,225 tons, representing a reduction of 3.57% over the same period last year. In December, Xingcheng Special Steel reported the largest export volume of bearing steel, 11,250 tons, accounting for the vast majority of bearing steel exports.
2. Bearing steel market stayed strong in January
Domestic bearing steel market price remained strong in January, poorly traded. Individual mills had good performance in orders, raising some confidence for price rising in laterperiod. Some mills will stop production for overhaul before the Spring Festival, which may result in reduction of resources release. Seen from the current trend in bearing steel market, stability will be the main tone in February. The price is more likely to rise rather than going down if there is no significant change in the macro side.
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, with rapid growth YoY and MoM for three consecutive months. The output and sales both exceeded 2.6 million, breaking a new record.
IV. Conclusions
Bearing steel price remained strong in January, with the turnover to be released. Near the year end, the demand of downstream end users is weak. The sales condition is difficult to change in any way of efforts. The market even fails to give a good response to price-cuting activities carried out by various steel mills.
As the Spring Festival is in February, all downstream users will have some stock before the time. Many steel mills will not start production after the Festival, so the entire demand in February will not be very good. However, individual steel mills have good performance in orders, which may push the price to go up in later period. For example, Xingcheng Special Steel has been at full capacity for continuous orders for three consecutive months, with the price staying in the rising trend in the range of about 100 yuan/ton. Besides, some mills will stop production for overhaul before the Spring Festival, which may result in reduction of resources release, thus creating conditions for price rising. Taken together, bearing steel price is expected to rise in February driven by the price push of steel mills, particular in late February, but the increase will not be great.
(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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