Monthly data: The trend of the bearing steel market prices may consolidate and run strongly in May

Overview: From January to March 2022, domestic crude bearing steel output increased by 3.22% year-on-year, and bearing steel output increased by 7.17% year-on-year. Looking back at the bearing steel market in April, the price of GCr15 high-end materials was strong, and the price of low- and medium-priced resources was adjusted weakly, and the release of terminal demand was always lower than expected. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 6557 yuan/ton, down 35 yuan/ton from the end of March, and the month-on-month decrease is 0.53%. Since April, the domestic epidemic has spread beyond expectations, the release of downstream demand has been suppressed again, logistics and transportation have been hindered, and inventory depletion has been hindered. In May, as the effect of epidemic control and control gradually emerged, and the country continued to increase its macro policy adjustment efforts to stabilize the economy and maintain smooth logistics, it is expected that the bearing steel market may consolidate strongly in May.

1. Domestic production of bearing steel

(1) Bearing steel output from January to March 2022: crude steel and steel both increased year-on-year

According to the statistics of the Special Steel Association, from January to March 2022, the crude steel output of bearing steel of my country's major high-quality special steel enterprises was 1.2057 million tons, an increase of 3.22% compared with the same period last year; from January to March 2022, my country's main high-quality special steel The output of bearing steel of the enterprise was 1.0579 million tons, an increase of 7.17% compared with the same period of last year, see Figure 1 for details.

(2) The output of finished products of bearing steel production enterprises from January to March 2022: the output of steel mills increased year-on-year

It can be seen from Figure 2 that at present, the largest production enterprises of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Hegang Shigang and Jiyuan Iron and Steel, accounting for 3% of the total output. 58%. From January to March 2022, the overall output of bearing steel is increasing. The output of Shigang, Laigang, Xinggang, Jianlong, Jiyuan, Shagang, Zhongte and other steel mills has increased compared with the same period last year. The output of steel mills such as Tianshan and Nangang decreased.

2. Domestic bearing steel market performance

In April, the market price of bearing steel partially fell, and the release of downstream demand was suppressed. The traditional "Silver Fourth" peak season has ended, but strong expectations have not arrived as scheduled, public health events in some regions continue to ferment, and the release of terminal demand has always been lower than expected. The market sales pressure is not reduced, and the merchants are cautiously wait-and-see, and the operation is mainly based on actively shipping and withdrawing funds. However, in view of the current high prices of raw materials and the overall meager profits of steel mills, it is expected that the bearing steel market may be consolidated and run strongly in May.

3. Relevant market information

(1) Raw material price:

The price of iron ore fluctuated downward in April, and the current 62% Australian powder index is US$146.2/dry ton. Macro news frequently appeared in April, crude steel production was suppressed, and the Political Bureau of the Central Committee put forward the requirements of stabilizing the economy. If the above-mentioned news introduced relevant specific measures in May, it would easily affect the market mentality, resulting in increased price volatility in a short period; domestic scrap steel fluctuated Running, the average price at the end of the month was 3324 yuan / ton. At present, the profit of steel mills is still relatively meager, and the electric furnace factory is even in a state of loss. The domestic epidemic situation has changed repeatedly, which has inhibited the release of downstream demand. However, under the influence of macroeconomic policies, it is expected that the price of scrap steel after the holiday may increase steadily and moderately. The downstream has limited acceptance of high-priced resources, and the factory's mentality of covering goods has changed. However, the ore price at the cost end continued to rise, and the transportation problem under the influence of the epidemic has not been completely solved, and the profit margin of the enterprises in production is still narrow. Buyers and sellers will wait for the post-holiday market, and it is expected that the ferrochrome market will run strongly and steadily after the festival.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in March 2022, the momentum of automobile consumption was obviously insufficient, showing a certain degree of decline. The production and sales of automobiles were 2.241 million and 2.234 million respectively, an increase of 23.4% and 28.4% month-on-month, and a year-on-year decrease of 9.1% and 11.7% respectively. From January to March, the production and sales of automobiles reached 6.484 million and 6.509 million respectively, a year-on-year increase of 2.0% and 0.2% respectively.

4. Conclusion

In April, the market price of bearing steel fell slightly, and the release of manufacturing demand was hindered. Affected by the epidemic, logistics in some areas were not smooth, and the release of downstream demand was suppressed, and the confidence of market merchants was obviously insufficient. In the recent stage, the steel pipe mills and forging plants in the downstream industries have not received new orders, and the steel mills and social inventories have accumulated to a certain extent. At present, the cost of raw materials such as iron ore and coke has caused the production cost of steel mills to remain high, which has formed a certain support for market prices. It is expected that the market price of bearing steel may be on the strong side in May.