Monthly data: Bearing Steel Market will be still likely to shock in July

Monthly data: Bearing Steel Market will be still likely to shock in July

Overview: From January to May, domestic bearing steel crude steel output increased by 0.31% year-on-year, and bearing steel output increased by 0.45% year-on-year. Looking back at the bearing steel market in June, the GCr15 market price showed an overall upward trend, and the effective terminal demand was really mediocre. Up to now, the average price of 50mm (continuous casting) of domestic bearing round steel is 4743 yuan/ton, up 33 yuan/ton from the end of May, and the month-on-month increase rate is 0.71%. Looking forward to July, the off-season effect of demand may continue. It is expected that the price of the domestic bearing steel market will fluctuate and consolidate in the later period, and the possibility of a slight decline is not ruled out.

Ⅰ. Domestic Bearing Steel Production

Production from January to April: Bearing crude steel and steel both rose year-on-year

According to the statistics of the Special Steel Association, the output of crude steel for bearing steel in China's major special steel companies was 1.5503 million tons from January to May 2020, an increase of 0.31% compared with the same period last year; the main special steel in China from January to May 2020 The enterprise's bearing steel output was 1.348 million tons, an increase of 0.45% compared with the same period last year. See Figure 1 for details.

2. From January to May, the output of finished steel of various bearing steel manufacturers: the output of steel mills increased year-on-year

As can be seen from Figure 2, the current bearing steel output is relatively large: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian Steel and Benxi Steel, accounting for 64% of the total output. From January to May 2020, the overall output of bearing steel is increasing. The output of steel mills such as Benxi Steel, Jianlong, Beiman, and Jiyuan has increased. The output of steel mills such as Xinggang, Shigang, Qilu, Xining, and Nangang has increased compared with the same period last year. Compared to a slight decrease.

Ⅱ.The domestic bearing steel market performance

Looking back at the bearing steel market in June, as the factory costs of major steel mills climbed, the bearing steel market prices showed an overall upward trend. Although the prices of raw materials continue to rise, the cost of steel mills has increased, but in view of the unsatisfactory performance of bearing supporting enterprises such as automotive bearings, electrical bearings, and metallurgical bearings, the price of bearing steel prices has not been driven up late. Looking forward to the bearing steel market in July, under the pressure of gradual intensification of the contradiction between supply and demand, it is expected that the price of the subsequent bearing steel market will partially drop, but the room for decline will not be very large.

Ⅲ. Relevant market information

1. Raw material price:

In June, the price of imported mines surged back into the consolidation phase, and the supply and demand of fundamentals were both strong. The price at the end of the month was US$100.05/dry ton. On the demand side, the operating rate of Chinese steel mills and the output of pig iron hit record highs. On the supply side, the Auba’s end-of-season impulse is obvious, and the weekly average shipment has increased significantly by 15% month-on-month. The growth rate of supply is obviously greater than the growth rate of demand. The general carbon scrap market is consolidating within a narrow range, with the average price at the end of the month at 2,350 yuan/ton. The high temperature weather will continue, the enthusiasm of steel mills to start construction will be reduced, and the demand for scrap steel will weaken. It is expected that the price of scrap steel will run weakly in the later period, but the room for decline is relatively limited; The average price is 6420 yuan/ton.

2. Downstream industry

According to the statistical analysis of the China Association of Automobile Manufacturers, the automobile production and sales situation in May continued to improve, showing a month-on-month growth, with a year-on-year growth rate significantly higher than last month. In May, automobile production and sales reached 2.187 million and 2.194 million, respectively, up 4.0% and 5.9% from the previous month, and up 18.2% and 14.5% from the same period last year. From January to May, automobile production and sales were 7.787 million units and 7.957 million units, a year-on-year decrease of 24.1% and 22.6%. Compared with January-April, the declines were narrowed by 9.3 percentage points and 8.5 percentage points respectively.

Ⅳ. Conclusion

Looking back at the bearing steel market in June, driven by the upward cost of steel mills and the strengthening of the futures market, the market prices showed an overall upward trend, with most steel mills gaining RMB 50-200/ton cumulatively. With the increasing pressure of supply and demand balance, the pressure of steel mills has further increased, and with the reduction of orders, the motivation for steel prices to continue to rise no longer exists. It is expected that the domestic bearing steel market prices will fluctuate and consolidate in July, and the possibility of a slight decline is not ruled out.