Monthly Summary: The trend of the bearing steel market prices may fluctuate weakly in November

Monthly Summary: The trend of the bearing steel market prices may fluctuate weakly in November

Overview: From January to September 2022, domestic crude bearing steel production decreased by 7.05% year-on-year, and bearing steel production decreased by 3.03% year-on-year. Under the influence of multiple factors such as repeated epidemics and recession fears caused by the expectation of US interest rate hikes, the bearish sentiment of merchants has gradually increased, and the market price has shown a volatile downward trend. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 5440 yuan/ton, down 32 yuan/ton from the end of September, and the month-on-month decrease is 0.58%. It is expected that the price of bearing steel may fluctuate weakly and adjust in November.

1. Domestic production of bearing steel

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

According to the statistics of the Special Steel Association, from January to September 2022, the crude bearing steel output of my country's major high-quality special steel enterprises was 3.377 million tons, a decrease of 7.05% compared with the same period last year; from January to September 2022, my country's main high-quality special steel The output of bearing steel of the enterprise was 3.0509 million tons, a decrease of 3.03% compared with the same period of last year.

(2) The output of finished products of bearing steel production enterprises from January to September 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 62% of the total output . From January to September 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 October, the market price of bearing steel showed a fluctuating downward trend, and the demand side showed weak performance. From the perspective of supply, the output of bearing steel was at a low level in August. Since September, with the completion of the maintenance of some steel mills, the output of steel mills has increased in the recent stage, and the supply pressure has appeared. In view of the relatively limited support effect of the demand link on prices, and the reality of strong supply and weak demand, market confidence is insufficient. It is expected that the price of bearing steel may fluctuate and weaken in November.

3. Relevant market information

(1) Raw material price:

The price of iron ore fell the most in October, with the 62% Australian powder index now at $79.4 per dry ton. From the current point of view, the price of iron ore has reached the cost line of non-mainstream ore after the deep drop at the end of October. If the negative feedback logic continues in the short term, the focus of suppression may shift from iron ore to the high-valued bi-coke, and iron ore is expected to increase in cost Under the support, there is a trend of stabilization or rebound; the domestic scrap steel market is running weakly, and the average price at the end of the month is 2350 yuan / ton. It is expected that the ferrochromium market will operate weakly and steadily in the short term.

(2) Downstream industries

According to the statistics and analysis of the China Association of Automobile Manufacturers, in September 2022, China's automobile production and sales volume will be 2.672 million and 2.61 million, an increase of 28.1% and 25.7% year-on-year. From January to September, the cumulative production and sales of automobiles reached 19.632 million and 19.47 million respectively, a cumulative year-on-year increase of 7.4% and 4.4% respectively.

4. Conclusion

Looking back at the bearing steel market in October, most materials showed a downward trend, the prices of individual materials were generally stable, and the market demand continued to weaken. Macroscopically, the Fed is particularly expected to raise interest rates, and the overall market confidence is still weak. From the perspective of supply, considering the relevant factors such as annual production indicators, the overall possibility of reduction in production of steel mills is small, and supply pressure appears. On the demand side, the demand for bearing steel pipe factories and forging factories has declined significantly, which is slightly sluggish compared with the same period of previous years. It is expected that the price of bearing steel may fluctuate weakly and adjust in November.