Bearing steel market rebounded after hit the bottom: Where to go next
Resource from: CBCC Likes:115
May 05,2016
A seminar was held for major bearing steel manufacturers in Nanjing Steel on April 15, where steel mills participated made presentations about their orders, production and operation in April and May. They also gave analysis on the market trend.
Influenced by the sharp rise of Tangshan billet prices in the first weekend of March, domestic bearing steel market experienced a rare boom at the beginning of the second week.
Production costs had been greatly increased due to the sharp rise in raw material prices. Bearing steel mills pushed up prices in March as high as 400 yuan/ton. The cumulative increase in late April was 150 yuan/ton.
Market sentiment was in confusion, so the price is pushed upward further.
Looking back on the operating conditions of bearing steel mills in 2015, the large majority of steel mills were at loss, and overcapacity remained a serious problem as much as the supply pressure. Today's market is embraced with both challenges and opportunities, and winner takes all. Although the effective demand of downstream end customers has not been greatly released, individual steel mills' prices are still below their marginal cost line, so they are willing to pull up the price further. Coupled with the recovery in current market demand, bearing steel price is expected to stay high in the short terms though the upward trend will slow down.
I. Output from January to March: crude bearing steel and bearing steel both declined year-on-year
According to the statistics of Special Steel Association, from January to March in 2016, the output of bearing crude steel reported by domestic major steel companies was 620,010 tons, decreased by 12.05% over the same period last year; in the same period, the steel output of domestic major steel companies was 626,300 tons, decreased by 8.70% over the same period last year. For details, see Figure 1:
II. Output of finished bearing steel from January to March
As shown in Figure 2, the first three for bearing steel production from January to March was CITIC Pacific Special Steel (Xinyegang Steel and Xingcheng Special Steel), Juneng Special Steel and Dongbei Special Steel, accounting for 60% of the total output. Wherein, CITIC Special Steel was on the top, with an output of about 240,000 tons in the first quarter; followed by Juneng Special Steel with an output of around 57,000 tons; and then Dongbei Special Steel with an output of 56,000 tons.
III. Bearing steel prices out of the upward trend with shocks in March
The price of steel bearing has been in the shock upward trend since March, and the trading volume was slightly increased. Leading steel mill Xingcheng Special Steel was in short supply, with the ex-factory price in a steady rise. Benxi Special Steel got out of the long-term loss situation, with the quoted price rising as high as 550 yuan/ton. Shijiazhuang Steel, Nanjing Steel and Juneng Steel also raised their prices to a different rate. Mainstream market price also showed a rising trend under the price-rising pressure of bearing steel. Up to now, the price of low-grade continuous casting non-annealed steel was 2900 yuan/ton; the price of medium-grade resources was 3200 yuan/ton; and the price of high-end resources was 4300 yuan/ton.
IV. Bearing steel export rose slightly in March
Bearing steel export rose slightly in March. The export volume was 13,415 tons, decreased by 182 tons, up by 31.28% YoY. According to the export changes of bearing steel in China shown in Fig. 4, Xingcheng Special Steel, Daye Special Steel and Dongbei Special Steel were the top three on the ranking list. Wherein, Xingcheng Special steel reported an export volume of 12,433 tons, accounting for the vast majority of the total.
V. Market outlook
Recently, domestic bearing steel market has been in a sharp rise trend which has not been seen for many years, which has brought vitality to the old "a pool of stagnant water" like market.
In the context of a strong rebound in raw materials, the price of bearing steel has been pushed to a higher level. Wherein, Benxi Steel reported a cumulative increase of up to 550 yuan/ton in March, and Xingcheng Special Steel, Shijiazhuang Steel, Nanjing Steel and Beiman Steel all had an adjustment of 400 yuan/ton. Xingcheng Special Steel, Juneng Steel, Benxi Steel and Dongbei Special Steel showed a relatively steady growth in steel output, while Baosteel Special Steel had a decrease in yield for being focused on lean product development. Benxi Special Steel has experienced rapid rise in market share in Jiangsu and Zhejiang region these years. The total input of bearing steel to Jiangsu and Zhejiang Provinces is around 1.5W tons a month.
Given the strong support in raw material prices, which results in further increase in production cost of bearing steel, and the current recovery of market demand, bearing steel price is expected to keep rising in late April and remain high in May with the possibility of surging in a less strong upward trend.
II. Output of finished bearing steel from January to March
As shown in Figure 2, the first three for bearing steel production from January to March was CITIC Pacific Special Steel (Xinyegang Steel and Xingcheng Special Steel), Juneng Special Steel and Dongbei Special Steel, accounting for 60% of the total output. Wherein, CITIC Special Steel was on the top, with an output of about 240,000 tons in the first quarter; followed by Juneng Special Steel with an output of around 57,000 tons; and then Dongbei Special Steel with an output of 56,000 tons.
III. Bearing steel prices out of the upward trend with shocks in March
The price of steel bearing has been in the shock upward trend since March, and the trading volume was slightly increased. Leading steel mill Xingcheng Special Steel was in short supply, with the ex-factory price in a steady rise. Benxi Special Steel got out of the long-term loss situation, with the quoted price rising as high as 550 yuan/ton. Shijiazhuang Steel, Nanjing Steel and Juneng Steel also raised their prices to a different rate. Mainstream market price also showed a rising trend under the price-rising pressure of bearing steel. Up to now, the price of low-grade continuous casting non-annealed steel was 2900 yuan/ton; the price of medium-grade resources was 3200 yuan/ton; and the price of high-end resources was 4300 yuan/ton.
IV. Bearing steel export rose slightly in March
Bearing steel export rose slightly in March. The export volume was 13,415 tons, decreased by 182 tons, up by 31.28% YoY. According to the export changes of bearing steel in China shown in Fig. 4, Xingcheng Special Steel, Daye Special Steel and Dongbei Special Steel were the top three on the ranking list. Wherein, Xingcheng Special steel reported an export volume of 12,433 tons, accounting for the vast majority of the total.
V. Market outlook
Recently, domestic bearing steel market has been in a sharp rise trend which has not been seen for many years, which has brought vitality to the old "a pool of stagnant water" like market.
In the context of a strong rebound in raw materials, the price of bearing steel has been pushed to a higher level. Wherein, Benxi Steel reported a cumulative increase of up to 550 yuan/ton in March, and Xingcheng Special Steel, Shijiazhuang Steel, Nanjing Steel and Beiman Steel all had an adjustment of 400 yuan/ton. Xingcheng Special Steel, Juneng Steel, Benxi Steel and Dongbei Special Steel showed a relatively steady growth in steel output, while Baosteel Special Steel had a decrease in yield for being focused on lean product development. Benxi Special Steel has experienced rapid rise in market share in Jiangsu and Zhejiang region these years. The total input of bearing steel to Jiangsu and Zhejiang Provinces is around 1.5W tons a month.
Given the strong support in raw material prices, which results in further increase in production cost of bearing steel, and the current recovery of market demand, bearing steel price is expected to keep rising in late April and remain high in May with the possibility of surging in a less strong upward trend.
(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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