Monthly data: The Bearing Steel Market may fluctuate weaker in November

Monthly data: The Bearing Steel Market may fluctuate weaker in November

Overview: From January to September, the output of domestic crude steel bearing steel increased by 23.40% year-on-year, and the output of bearing steel increased 19.01% year-on-year. Looking back at the bearing steel market in October, under the influence of the continuous improvement of fundamentals and the influence of multiple factors, the market price showed a trend of ups and downs, ranging from 50-200 yuan/ton. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 6888 yuan/ton, an increase of 90 yuan/ton from the end of September, and a month-on-month increase of 1.32%. In view of the relatively limited support effect of the demand link on prices, and the slowdown in inventory decline, it is expected that the bearing steel market price may fluctuate weakly in November.

1. Domestic production of bearing steel

(1) The output of bearing steel from January to September 2021: both crude steel and steel increased year-on-year

According to statistics from the Special Steel Association, from January to September 2021, my country’s major high-quality special steel enterprises produced 3.5083 million tons of crude steel bearing steel, an increase of 23.40% compared to the same period last year; from January to September 2021, my country’s major high-quality special steels The company's bearing steel output was 3.045 million tons, an increase of 19.01% compared with the same period last year, as shown in Figure 1.

(2) The output of finished products of bearing steel production enterprises from January to September 2021: the output of steel mills increased year-on-year

It can be seen from Figure 2 that the current production enterprises of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian and Benxi Steel, accounting for 59% of the total output. . Although steel mills have released maintenance plans in recent stages, the overall output of bearing steel will increase from January to September 2021. The output of Beiman, Xinggang, Shagang, Xining, Nangang, Zhongte, Shigang, Jiyuan and other steel mills is higher than that of last year. Compared with the same period, the output of steel plants such as Jianlong, Benxi Iron and Steel, Zhongtian and Juneng decreased slightly.

2. The performance of the domestic bearing steel market

In October, the price of bearing steel market went up and down, and the demand side showed weak performance. From a supply perspective, the supply of bearing steel continues to decrease in some areas affected by the "power curtailment" policy. However, the dual control of energy consumption has also affected some downstream enterprises with high energy consumption. The demand for bearing steel pipe mills and forging plants has declined significantly, end users are more cautious in purchasing, and the market has a strong wait-and-see sentiment. In view of the relatively limited support effect of the demand link on the price, it is expected that the price of bearing steel may fluctuate weakly in November.

3. Relevant market information

(1) Raw material price:

The price of iron ore in October was mainly fluctuating, and the Mysteel 62% Australian powder index is now US$107.55/dry ton. The fundamentals of iron ore in November will show a pattern of double decline in supply and demand, but the oversupply situation will continue, and iron ore inventories will continue to accumulate. Driven by fundamentals and other external factors, iron ore prices will continue to weaken in November; the domestic scrap market as a whole shows a trend of first rising and then falling, with an average price of 3269 yuan/ton at the end of the month. The impact of production restrictions and power restrictions is still continuing. Steel mill production has not fully recovered. Scrap support is small and it is difficult to survive alone. The price may show a downward trend. The high-carbon ferrochrome market has risen and fallen, and the price at the end of the month is 10,500 yuan/ton.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in September 2021, the production and sales of automobiles will be 2.077 million and 2.067 million respectively, an increase of 20.4% and 14.9% month-on-month, and a year-on-year decrease of 17.9% and 19.6% respectively. In September, chip supply eased slightly, but it still could not meet production needs. In addition, the base figure of the same period last year was relatively high. Therefore, the month-on-month automobile production and sales increased month-on-month, but decreased year-on-year. From January to September, the production and sales of automobiles were 18.243 million and 18.623 million respectively, representing a year-on-year increase of 7.5% and 8.7% respectively, and the growth rate continued to drop by 4.4 and 5 percentage points from January to August.

4. Conclusion

Looking back on October, the domestic bearing steel market prices were both ups and downs. Some high-end materials rose slightly, and most of the materials showed a downward trend. In view of the widening price difference between GCr15 price and 45# carbon structure steel, Zhongtian, Nanjing Steel and other steel plants reached 650-850 yuan/ton, making end users more cautious in purchasing. It is expected that the domestic bearing steel market prices will continue to adjust in November, and the possibility of weaker shocks is greater.