Monthly data:2018 China Bearing Steel market trend in Jan-will Callback

Summary: According to the data of year-on-year growth from January to November, the yields of Chinese crude bearing steel increased by 13.72%, Bearing steel increased by 8.08%. Review the bearing steel market of Dec, the price of GCr15 stabilized after being first raised, the first half of the month soared to nearly three years of new high prices，and most of steel prices rose quickly, up 300-550 RMB/Ton. So far, the lowest price for casting unannealed material is 5300RMB/ton, 5800RMB/Ton and 6700RMB/Ton corresponding to Middle grade and High-grade material. In view of the relatively limited supportive effect of the demand link on the price, coupled with the reduction of steel mills capacity release, inventories fell less than expected. It is estimated that the market price of bearing steel in January is likely to have a weak previous callback. After the callback, it will maintain its steady operation.

1.The Domestic Yields of Bearing Steel

1.1 Yields From January to November: Crude bearing steel and bearing steel both increased comparing to last year.
As the data shows from China Steel, the output of crude bearing steel reach up to 2,890,200 tons from Jan to Nov, 2017, rose by 13.72% compared to 2016. The yields of bearing steel is 2,731,300 tons, which is increased by 8.08% year-on-year growth. Details refer to Pic 1:

1.2 Yields data of The finished steel From Jan to Nov: Increased year-on-year
From Pic 2, the yields from ZHONGXING Bearing Steel(XINYE and XINCHENG), DONGTE and BENTE are the top three companies ahead of others, and these three contributes 59% of the yields.The total yields of bearing steel was still growing , Outputs from ZHONGXING Bearing Steel, JIGANG, Xing Bearing Steel, QINGANG, JIANLONG and ZHONGXING Bearing Steel were increased separately, but JUNENG, XINING,QILU bearing steel were decreased slightly.

2.Performance of China Bearing Steel Market

In December, the price of the bearing steel market continued to rise, and most steel mills gained 300 to 550 yuan per ton. However, the market demand has not been significantly improved, the merchants accept relatively slowly in the process of price increase.Because the reduction of steel production capacity will not be reduced, the latter part of the inventory pressure is difficult to change, so bearing steel prices are expected to fall in January, but the overall decline is not deep, the market will be down shock operation.


3.Related Market Information

3.1 Raw Material Price
In December, the price of imported minerals fell to 73.5 dollars/ton. While the market price of general carbon and rust steel remained  higher to 2116 RMB/ton, which was increased by 21.82% comparing with last month. The price of high carbon ferrochrome remain small consolidation and the average price was 7353 RMB/ton at the end of this month. So its estimate that raw material market run with pressure in January.

3.2 Downstream Industry
Statistics from China Automobile Industry Association: 
Automobile production and sales volume of November, 2017 increased than last month, but the growth rate was lower. From January to November, the year-on-year growth of automobile production and sales increased slightly compared with the previous 10 months. In Octomber, the yields of autos reach to 30,803,000 units, the result is increased by 18.69% comparing with last year, and increased by 2.31% year-on-year . Sales volume reaches to 2,957,600units, the result increased by 9.73% comparing with last year, and increased by 0.65% year-on-year . From January to November, both yields and sales volume is 25,998,800 units and 25,844,900units, increased by 3.88% and 3.59% year-on-year growth. The growth rate increased by 0.39 percentage point and 0.54 percentage point from January to Octomber.

3.Conclusion

Looking back at the bearing steel market in December, the price of the GCr15 was first raised and then stabilized, and the last half of the month continued to surge to a new high of nearly three years. Most of the steel mills have gained 300 to 550 yuan per ton. The current downstream procurement costs increased significantly over previous years, excessive financial pressure led to a significant slowdown in procurement efforts. As far as the overall orders of the steel mills are concerned, the demand for direct supply households is relatively stable, but the volume of trader agreements is decreasing month by month.
Because the price difference between GCr15 and 45 # carbon steel is increasing, Zhongtian, Nangang, Jianlong and other steel mills have reached up to 650-750 yuan / ton, making end-user purchases more cautious and the market was more and more on the sidelines.
In the case that the profit of bearing steel production enterprises is considerable, the production enthusiasm of the steel mills is high, and the planned capacity utilization rate is at a high level. It is expected that the price of the bearing steel market in January will be adjusted for the weak and will be stable after the callback.