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

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

Overview: From January to October 2022, the domestic production of bearing steel crude steel decreased by 6.20% year-on-year, and the output of bearing steel decreased by 2.88% year-on-year. Looking back at the bearing steel market in November, the improvement in fundamentals continued to be lower than expected, the demand was still at a low level year-on-year, and the overall market price showed a slight downward trend. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 5380 yuan/ton, which is 72 yuan/ton lower than that at the end of October, and the month-on-month decrease is 1.32%.

1. Domestic production of bearing steel

(1) Bearing steel output from January to October 2022: steel products increased year-on-year, crude steel decreased year-on-year

According to statistics from the Special Steel Association, from January to October 2022, the output of bearing steel crude steel of my country's major high-quality special steel enterprises was 2.8151 million tons, a decrease of 3.62% compared with the same period last year; The output of the enterprise's bearing steel was 2.5073 million tons, an increase of 0.58% compared with the same period last year.

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

At present, the production enterprises with large bearing steel production are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Jiyuan Iron and Steel and Shagang (Northeast Special Steel, Yonggang), accounting for 61% of the total output . From January to October 2022, the overall output of bearing steel is increasing. The output of steel plants such as Shigang, Laiwu Steel, Jiyuan, Jianlong, Zhongte, and Shagang has increased slightly compared with the same period last year. Xining, Beiman, Xinggang, Zhongtian , Bente, Nanjing Iron and Steel, Juneng and other steel mills have reduced output.

2. Domestic bearing steel market performance

In November, the market price of bearing steel dropped slightly, and it is difficult to realize the off-season storage. From the perspective of inventory, the destocking speed of factory warehouses and corporate warehouses is very slow, and the market is currently facing greater pressure to destock. It is expected that the market price of bearing steel in December will be adjusted mainly due to shocks. In the short term, we still need to pay attention to the release of demand and the impact of unexpected events on the market.

3. Relevant market information

(1) Raw material prices

In November, the price of iron ore was under pressure, and the current 62% Australian powder index was 100.15 US dollars/dry ton. The domestic scrap steel market showed a fluctuating upward trend, and market resources were tight, with the average price at the end of the month at 2,658 yuan/ton. The market price of high-carbon ferrochromium is running weakly, and the transaction still needs to be followed up. The price at the end of the month is 7600 yuan/ton.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in November 2022, the production and sales of automobiles will be 2.455 million and 2.42 million, a decrease of 1.8% and 3.3% from the previous month, and a year-on-year increase of 31.5% and 29.7%. Although the production and sales volume of the current month was lower than that of the previous month, it was the highest value in the same period of the previous year. It is generally judged that the current development trend of the industry is good and is expected to continue. From January to November, the production and sales of automobiles were 14.571 million and 14.477 million respectively. The output increased by 0.8% year-on-year, and the sales volume decreased by 2% year-on-year.

4. Conclusion

In November, the market price of bearing steel continued to decline as a whole, and the market was in a strong wait-and-see mood. At present, the transfer of steel mill inventory to social inventory has been reflected, the bearing steel inventory in the mainstream market is showing a rising trend, and the inventory pressure of some bearing steel pipe factories is prominent. Recently, the price difference between GCr15 price and 45# carbon structural steel has expanded, and the price difference of some steel mills has reached 700-950 yuan/ton. It is expected that the market price of bearing steel will continue to fluctuate weakly in December.