Monthly data:2020 Bearing steel market may still fall in April

Summary: from January to February, the output of domestic bearing steel increased by 10.33% year on year, and the output of bearing steel increased by 6.87% year on year. Looking back at the bearing steel market in March, the price of GCr15 market fluctuated weakly and the demand recovered obviously from the earlier stage, but it still did not return to the normal state. Up to now, the low price resources of continuous casting non annealed materials in China are 4200 yuan / ton; the price of medium grade materials is 4400 yuan / ton; and the price of high-end materials is 5100 yuan / ton. At present, the active production reduction of bearing steel manufacturers is insufficient, and steel mills and social inventories are still at a high level. It is expected that the bearing steel market will still have room to fall in April.

Domestic Bearing Steel Production

1. Output from January to February: Bearing crude steel and steel increased year on year

According to the statistical data of Special Steel Association, the output of bearing steel of main excellent and special steel enterprises in China from January to February 2020 is 611500 tons, up 10.33% compared with the same period of last year; the output of bearing steel of main excellent and special steel enterprises in China from January to February 2020 is 525900 tons, up 6.87% compared with the same period of last year, see Figure 1 for details.

2. Output of finished products of bearing steel manufacturers from January to February: year on year increase of output of steel mills

From Figure 2, it can be seen that at present, the output of bearing steel is relatively large: CITIC special steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Steel), Benxi Steel and Zhongtian, accounting for 69% of the total output. The overall output of bearing steel is increasing from January to February of 20 years. The output of Benxi Steel, Jiyuan steel, Beiman steel, Jianlong steel, CITIC steel, Shagang steel, Zhongtian steel and other steel plants is increasing. The output of Juneng steel, Nangang steel, Shigang steel, Xining steel and other steel plants is slightly reduced compared with the same period of last year.

Ⅱ.Performance of the domestic bearing steel market

In March, the bearing steel market price fluctuated weakly, and the overall market sentiment was poor. At present, the price difference between GCr15 and 45 × carbon steel has increased, and the price difference of some steel plants has reached 600-800 yuan / ton. From the perspective of demand, the impact of the global new crown epidemic on the export of auto parts and (small) home appliances enterprises is very large. The steel pipe plant and forging plant basically purchase on demand, and the supply and demand fundamentals are under pressure again due to the obstruction of export. At present, the bearing steel plant and social inventory are all at a high level, and the pressure of market stock reduction is large. It is expected that the domestic bearing steel price will still have downward space in April.

Ⅲ.Relevant market information

Price of raw materials:

In March, the price of imported ore rose first and then fell. At the end of the month, the price was 83.55 USD / ton. In the first ten days, thanks to the firm reduction price at the supply end, the price fell in the last ten days due to the expected impact of global demand reduction, and the iron ore price is expected to operate weakly under various pressures in the later period; the general carbon scrap market continued to decline, with the average price at the end of the month at 2201 yuan / ton. Affected by the decline of finished material prices, steel mills have lowered scrap prices, resulting in a drop in market prices. At the same time, the recovery rate of scrap processing and distribution enterprises has been greatly increased, scrap output has increased, market resources have increased, steel plant arrival has continued to increase, and scrap price continues to be depressed; the market price of high carbon ferrochrome is weak, down 6.49% from the end of last month, and the average price at the end of last month is 5941 yuan / ton. Due to the global manufacturing and steel plant production reduction caused by the spread of the epidemic, the global demand for raw materials has been reduced to a certain extent. It is expected that the market price of raw materials will be weak in April.

Downstream industries

Novel coronavirus pneumonia was affected by the new crown pneumonia epidemic in China in February 2020. The monthly sales of automobiles and their sales were significantly lower than those of the previous month. In the same month, automobile production and sales reached 285000 and 310000, with a month on month decrease of 83.9% and a year-on-year decrease of 79.8% and 79.1%. It is expected that with the enterprises gradually returning to work and production in late February, the automobile production and sales in March will be significantly higher than that in February.

Ⅳ.Conclusion

In March, the bearing steel market, the improvement of fundamentals continued to fall short of expectations, and some market prices began to fall slightly. In recent years, the output of bearing steel production enterprises is high. Under the condition of high inventory pressure, capital flow and risk control are particularly important. With the continuous fermentation novel coronavirus pneumonia abroad, the whole situation has become more severe, which has an impact on China's export trade. The export orders of the bearing steel related manufacturing industry chain will also be reduced.

Bearing steel market is expected to fall in April due to heavy domestic export pressure, continuous capacity release of steel plants and lower inventory than expected.