Monthly data:2018 China Bearing Steel market trend in Aug-will be stable

Summary: Domestic crude steel output increased by 15.27% year-on-year in January-June, and bearing steel output increased by 14.95% year-on-year. Up to now, the low-cost resources for continuous casting and non-annealing materials in China are 5,000 yuan/ton; the mid-range materials are priced at 5,300 yuan/ton; the high-end materials are 6,300 yuan/ton. It is expected that the market price of bearing steel will remain stable in August, and some materials will not be excluded.

I. Domestic bearing steel production

1.The production of January-June:  crude steel, bearing steel both rose year-on-year

According to the statistics of the Special Steel Association, the output of crude steel for bearing steel of the main U-steel enterprises in China from January to June 20,09.79 million tons, an increase of 16.69% compared with the same period of last year; the main special steel output of enterprise bearing steel was 1,966,600 tons in China from January to June 2018, an increase of 17.13% compared with the same period of last year. See Figure 1.

2. Bearing steel production of various production enterprises from January to June: steel mill output increased year-on-year

As can be seen from Figure 2, the current bearing steel output is: CITIC Special Steel (Xinye Steel, Xingcheng Special Steel, Qingdao Iron and Steel), Zhongtian and Giant Energy, accounting for 57% of the total output. In the first six months of January and June, the overall output of bearing steel increased. The output of steel mills such as Zhongtian, Shagang, Nangang, Zhongte and Sugang increased compared with the same period of last year, but Xing Gang, Bent, Jianlong and Xining The output of steel mills such as Beiman and Baote decreased slightly.

II.The domestic bearing steel market performance

Looking back at July, due to the high price of some materials in the previous period, such as Zhongtian, Nangang, Jiyuan and other steel mills, the transaction price has dropped slightly, ranging from 50-150 yuan/ton. Looking forward to the bearing steel market in August, it is expected that the price of subsequent bearing steel mills will not increase.

III. Relevant market information

1. Raw material price:

In July, the price of imported minerals rose first and then rose, and the overall price rose slightly. The price at the end of the month was US$67.6/dmt; the price of ordinary carbon scrap market fluctuated upwards, and the average price at the end of the month was 2144 yuan/ton, up 8.39% from the end of last month. The ferrochrome market is weak, and the average price at the end of the month is 7393 yuan / ton. Under the devaluation of the renminbi and the high pressure of environmental protection, it is expected that the raw material market will be strong in August.

2. Downstream industry

According to the statistical analysis of the China Association of Automobile Manufacturers, in June 2018, automobile production and sales decreased slightly, a slight increase year-on-year. From January to June, automobile production and sales maintained steady growth. Compared with January-May, the output growth rate increased, and the sales growth rate dropped slightly. Compared with the same period of last year, the output growth rate slowed down and the sales growth rate slowed down. Production and sales growth rate is slightly increased and higher than the association's expectations at the beginning of the year. In June, the automobile production was 2,298,600 units, a decrease of 2.33% from the previous month and an increase of 5.77% from the same period of last year. The sales volume was 2,273,700 units, a decrease of 0.61% from the previous month and an increase of 4.79% from the same period last year. From January to June, the production and sales of automobiles were 1,005,700 and 1,406,600, a year-on-year increase of 4.15% and 5.57%. Compared with the same period of last year, the output growth rate dropped by 0.49 percentage points, and the sales growth rate increased by 0.83 percentage points.

Ⅳ. Conclusion

In view of the limited support effect of the demand link on the price, the release of steel mill capacity is not reduced, and the decline rate of inventory is less than expected. It is expected that the price of the bearing steel market will not increase in August, and some materials may be adjusted slightly.