Monthly data:2019 China Bearing Steel market trend will shock weakly in January

Summary: From January to November, the output of crude bearing steel in China increased by 12.72% and that of bearing steel increased by 14.54%. Looking back on the bearing steel market in December, the price of bearing steel is running weakly, the trading performance is not good, and the market  is weak. Up to now, the low-cost resources of non-annealed continuous casting materials in China are 4500 yuan/ton; the price of medium-grade materials is 5000 yuan/ton; and the price of high-end materials is 6200 yuan/ton. It is expected that the market price of bearing steel will oscillate weakly in January.

1. Domestic bearing steel production

    

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

   According to the statistics of Special Steel Association, the output of bearing steel in major special steel enterprises in China from January to November 2018 was 36691,000 tons, an increase of 12.73% compared with the same period last year; the output of bearing steel in major special steel enterprises in China from January to November 2018 was 35492,000 tons, an increase of 14.54% compared with the same period last year. See Figure 1.

    

    

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

   As can be seen from Figure 2, the current bearing steel output are CITIC Special Steel (Xinye Steel, Xingcheng Special Steel, Qingdao Iron and Steel), Zhongtian and Giant Energy, accounting for 58% of the total output. In the first six months of January and October, the overall output of bearing steel increased. The output of steel mills such as Jiyuan, Shagang, Zhongte, Nangang and Sugang increased compared with the same period of last year, but Xing Gang, Bent, Jianlong and Beiman decreased slightly.

    

    

   II.The domestic bearing steel market performance

    

   Looking back at December, bearing steel market showed a downward trend due to poor downstream demand and capital shortage of enterprises. At present, steel pipe factories and forging factories are basically purchasing on demand. The overall demand is still restricted to a certain extent, and the contradiction between supply and demand in the future market is still acute. It is expected that the market price of bearing steel will be difficult to get rid of the falling trend in January, but there is little possibility of a sharp fall.

    

   III. Relevant market information 

    

   1. Price of raw materials:

   In December, the import mining market shocked strongly, with the end-of-month price of $72.5 per ton; the general weak pattern of the general carbon scrap steel market continued, with the end-of-month average price of $2206 per ton, up 10.47% from the end of last month; the high-carbon ferrochromium market consolidated narrowly, with the end-of-month average price of $6960 per ton. It is expected that the price of raw materials market will be mainly high shock in January.

    

   2. Downstream industries

   According to the statistical analysis of China Automobile Industry Association, in November 2018, automobile production and sales showed a slight increase annually, and the decline was still obvious year-on-year. From January to November, the production and sales of automobiles continued to show a downward trend year on year, and the decline was larger than that of January to October. In November, automobile production increased by 7.02% year-on-year and decreased by 18.89% year-on-year, while sales of 2.5478 million vehicles increased by 7.05% year-on-year and decreased by 13.86% year-on-year. From January to November, the production and sales of 25.325.2 million vehicles and 25.419.7 million vehicles decreased by 2.59% and 1.65% year on year.

    

   Ⅳ. Conclusion

   In December, the price of bearing steel was running at a disadvantage, especially for hot rolled non-annealed materials. It is anticipated that the market performance of bearing steel will be difficult to see a strong reversal before the year, and there will be no wide-ranging downstream demand level, and the overall supply and demand pressure will not be reduced. In summary, it is expected that the domestic bearing steel market in January lacks momentum, and the overall situation will continue to show weak shocks.