Monthly data:Bearing steel market will be under pressure in March

Monthly data:Bearing steel market will be under pressure in March

Summary: From January to December, the domestic crude steel production of bearing steel decreased by 1.61% year-on-year, and the output of bearing steel decreased by 6.75% year-on-year. Looking back at the bearing steel market in February, the price of the GCr15 market fluctuated slightly, and downstream start-up was delayed. As of now, the low-cost resources for domestic continuous casting unannealed materials are 4,300 yuan / ton; mid-range materials are priced at 4,450 yuan / ton; and high-end materials are 5,200 yuan / ton. Affected by health emergencies, market traders and downstream enterprises have been slow to resume work and production, and steel plant inventory and social inventory are backlogged. In view of the fact that downstream demand is difficult to recover in the short term, and the capacity release of steel mills has not diminished, it is expected that the bearing steel market will operate under pressure in March, and it is more likely that some materials will be weak.

I. Domestic Bearing Steel Production

1. January-December output: bearing crude steel and steel both declined year-on-year

According to the statistics of the Special Steel Association, the crude steel production of bearing steel by major special steel enterprises in China in January-December 2019 was 3,6520,000 tons, a decrease of 1.61% compared with the same period last year; the major special steels in China during January-December 2019 The company's bearing steel output was 3.376 million tons, a decrease of 6.75% compared with the same period last year. See Figure 1 for details.

2. From January to December, the output of finished steel products of bearing steel manufacturers: steel mill output decreased

It can be seen from Figure 2 that currently the largest output of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian and Juneng, accounting for 64% of the total output. In 19 years, the overall output of bearing steel is decreasing. The output of Shagang, Qilu, Jianlong, Xining, Benxi Iron and Steel, Shigang, Baote, Nangang and other steel mills have all decreased. The output of the four steel mills increased slightly compared to the same period last year.

Ⅱ.Performance of the domestic bearing steel market

Looking back at February, the price of the bearing steel market was adjusted weakly, and the overall market sentiment was more pessimistic. Affected by public health emergencies, delayed release of terminal demand, bearing steel mills, and market inventory are at high levels. Although some steel mills have reduced production slightly, the reduction in production is insignificant compared to the current high inventory, and the inventory pressure in the later period is still severe. Short-term demand is slowly recovering, and fundamentals are still under pressure. It is expected that domestic bearing steel prices will continue to operate under pressure in March.

Ⅲ.Relevant market information

1. Price of raw materials:

The price of imported ore was weak in February, and the price at the end of the month was $ 84.9 per dry ton. At present, the iron ore inventory of steel mills is low, and there is a demand for rigid restocking after resumption. At the same time, the price of scrap steel is much higher than the cost of molten iron, which has underpinning support for the price of iron ore. /Ton. At present, the national scrap steel market has entered the pace of full-scale resumption of work, and steel mills have gradually resumed procurement. Although the price adjustments in various regions have fallen more and less, the price is not ideal compared to the pre-holiday period. Large increase; high-carbon ferrochrome market prices rose slightly, an increase of 1025% over the end of last month, the average price at the end of the month was 6,190 yuan / ton. At present, the start of demand is slow. Against the background of optimistic steel prices, it is expected that the overall market price of raw materials will be weak in March.

2. Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in January 2020, due to the partial release of demand in December last year, and the traditional Chinese New Year holiday in January, the start-up days of enterprises decreased compared to previous years, and therefore production and sales both declined month-on-year and year-on-year. During the month, 1.767 million vehicles and 1.927 million vehicles were sold, down 34.1% and 27.5% month-on-month, and down 25.4% and 18.7% year-on-year. Although the new crown pneumonia epidemic also appeared in January, the impact on the automotive market will not fully manifest until February. It is expected that the decline in automotive production and sales in February will be more significant than in January.

Ⅳ.Conclusion

In February, the bearing steel market was weakly adjusted. Due to the impact of public safety events, the market basically stagnated and downstream demand was delayed. At present, steel plant inventory pressure is gradually increasing, and short-term market demand is difficult to be optimistic. The overall spot link is still under significant pressure. Judging from the current situation, the market pressure is still accumulating. In the short term, the pressure on merchants to ship is greater, and the pressure on repayment of steel pipe plants and forging plants is also obvious. The start-up situation of downstream enterprises was lower than expected, and the inventory pressure was difficult to change in the later period. It is expected that the bearing steel market price will continue to operate under pressure in March.