Monthly Summary: The trend of the bearing steel market prices may down slightly in October

Monthly Summary: The trend of the bearing steel market prices may down slightly in October

Overview: From January to August 2022, domestic crude bearing steel production decreased by 7.98% year-on-year, and bearing steel production decreased by 3.95% year-on-year. Looking back at the bearing steel market in September, the market price was generally stable, and the market transaction slightly improved. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 5472 yuan/ton, down 10 yuan/ton from the end of August, and the month-on-month decrease is 0.18%. It is expected that the market price of bearing steel in October will be high and then low, and the overall average price level will be higher than that in September.

1. Domestic production of bearing steel

(1) Production of bearing steel from January to August 2022: both steel and crude steel decreased year-on-year

According to the statistics of the Special Steel Association, from January to August 2022, the crude steel output of bearing steel of my country's major high-quality special steel enterprises was 3.0477 million tons, a decrease of 7.98% compared with the same period last year; from January to August 2022, my country's main high-quality special steel The output of bearing steel of the enterprise was 2.758 million tons, a decrease of 3.95% compared with the same period of last year.

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

At present, the largest production enterprises of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Steel), Jiyuan Steel and Shagang (Northeast Special Steel, Yonggang), accounting for 61% of the total output . From January to August 2022, the overall output of bearing steel is decreasing, and the output of steel mills such as Shigang, Laigang, Jiyuan, and Jianlong has increased slightly compared with the same period last year. The output of steel, Juneng, CITIC and other steel mills all decreased.

2. The Domestic Bearing Steel Market Performance

In September, the market price of bearing steel was generally stable, and the "Golden Nine" market failed to materialize as scheduled. Due to the strong performance of raw material prices, steel mills are basically on the verge of profit and loss or in a state of meager profit, and merchants generally have a persistently optimistic attitude towards the market outlook. It is expected that the market price of bearing steel may run high and then low in October, and the overall average price level has risen compared with September.

Table 1: Current ex-factory acceptance price of bearing steel mills

3. Relevant market information

(1) Raw material price:

The price of iron ore fell slightly in September, and the current 62% Australian powder index is US$95.8/dry ton. The domestic scrap steel market showed a relatively stable trend of narrow fluctuations, with an average price of 2,683 yuan/ton at the end of the month. The 20th National Congress of the Communist Party of China is about to be held, and the policy support is expected to be further strengthened. The scrap steel market may be affected by the general environment in the short term, and prices may rise steadily.

(2) Downstream industries

According to the statistics and analysis of the China Association of Automobile Manufacturers, in August 2022, the production and sales of automobiles continued to maintain a rapid growth momentum year-on-year, with production and sales of 2.395 million and 2.383 million vehicles, an increase of 38.3% and 32.1% year-on-year respectively. This month, the production and sales of new energy vehicles and the export of automobiles both hit record highs year-on-year. At present, the industry continues to maintain a good development trend and is expected to continue. From January to August 2022, the production and sales of automobiles will reach 16.967 million and 16.86 million respectively, a year-on-year increase of 4.8% and 1.7% respectively, which is the first double increase in production and sales since the second quarter.

4. Conclusion

In September, the market price of bearing steel was generally stable, and the market was intertwined with long and short factors. The price of raw materials has rebounded this month, but the overseas Fed has raised interest rates and the macroeconomic environment has continued to tighten. Recently, steel pipe factories and forging factories have continued to increase the pressure of payment collection. Tight capital is still the main factor restricting the price increase, and downstream concerns still exist. It is expected that the market price of bearing steel may fluctuate from high to low in October, but due to the support of costs, the overall spot market will not decline significantly.