Monthly Summary: The Market Price of Bearing Steel Will Show a Weak Trend of Shock in May

Monthly Summary: The Market Price of Bearing Steel Will Show a Weak Trend of Shock in May

Overview: From January to March in 2023, the domestic crude steel output of bearing steel decreased by 0.69% year-on-year, and the bearing steel output decreased by 2.63% year-on-year. Looking back at the bearing steel market in April, the overall downward trend shows a shock, downstream demand starts less than expected, and businessmen are frustrated. Up to the present domestic bearing round steel 50mm(continuous casting) average price is 5394 yuan/ton, compared to the end of March down 84 yuan/ton, month-on-month decline of 1.56%. Recent overseas market demand weakened, the second quarter bearing steel exports may be reduced, domestic trade pressure increased. With the coming of the off-season, the demand for bearing steel is insufficient. It is expected that the market price of bearing steel in May will weaken or shock.

1. The domestic output of bearing steel

(1) The output of bearing steel from January to March 2023: both steel and crude steel decreased year-on-year

According to the special steel association statistics show that in 2023 from January to March, the main special steel enterprises bearing steel crude steel production of 1,23,400 tons, compared with the same period last year decreased by 0.69%; From January to March in 2023, the bearing steel output of China's main special steel enterprises was 1,0655,400 tons, down 2.63% compared with the same period last year.

(2) The output of finished materials of bearing steel production enterprises from January to March 2023: the output of steel mills decreased year-on-year

At present, the major bearing steel producers are: Citic Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Steel), Jiyuan Steel and Shigang, accounting for 59% of the total production. From January to March in 2023, the overall output of bearing steel is decreasing, the output of Jiyuan, Shigang, Jueng, Nangang, Bensteel, Zhongtian and other steel mills increased slightly compared with the same period last year, and the output of Xining, Lai Steel, Xing Steel, Beiman, Bente, Northeast Special Steel, Citic Special Steel and other steel mills were reduced.

2. The domestic bearing steel market performance

April bearing steel market price shock down, the overall market mood is poor. In terms of inventory, the trend of inventory withdrawal continued in April, but the pace of inventory withdrawal slowed down compared with March. According to the feedback from the current downstream situation, the industry order demand of wind power, construction machinery, automobile and other downstream industries is not optimistic, and the demand for bearing steel may remain low. In view of the demand link to the price of the support effect is more limited, superimposed market confidence is insufficient, is expected to May bearing steel market prices or will show a weak trend of shock.

3. Relevant market information

(1) Price of raw materials

April iron ore prices as a whole still fell, is Mysteel62% Australian powder index 106.7 dollars/dry ton. At present, the output of molten iron is at the high level of this year, and the overall capacity of demand to supply is relatively strong. However, the capacity of destocking is constantly weakening, and it is slowly changing towards the trend of accumulation. May iron ore prices are expected to remain weak shocks; After the domestic scrap market consolidation, the overall downward operation, the absolute price is 2997 yuan/ton. Steel production cuts, maintenance caused by scrap demand decline is a foregone conclusion, scrap is difficult to break down the channel, May scrap prices continue to decline overall probability; High carbon ferrochrome market prices stabilized, the end of the price at 8611 yuan/ton. At present, the production cost of ferrochrome is mainly driven up by the high price chromium ore in the upstream, and the tight supply situation is difficult to improve due to the limited spot resources in the short term. The production cost of ferrochrome is expected to remain high in the short term.

(2) Downstream industries

According to the statistics and analysis of China Association of Automobile Manufacturers, in March 2023, the automobile production and sales volume respectively completed 2.584 million and 2.451 million, with year-on-year growth of 15.3% and 9.7% respectively. In the first quarter, the production and sales volume of automobiles were 6.21 million and 6.076 million, respectively, down 4.3% and 6.7% year-on-year. In the first quarter, the automobile industry entered the transition period of promotion policies. The withdrawal of preferential policies of purchase tax for traditional fuel vehicles and the end of subsidies for new energy vehicles caused early consumption at the end of last year, and the relevant succession policies are still unclear. Since the beginning of the year, the price reduction of new energy vehicles and the promotion tide since March have produced fluctuations on the terminal market, making the overall economic operation of the automobile industry facing greater pressure.

4. Conclusion

Bearing steel market prices weak downward in April, market pessimism is obvious. At present, the price difference between GCr15 and 45# carbon bonded steel has widened, and the price difference of some steel mills has reached 600-800 yuan/ton. It is expected that the domestic bearing steel market price will continue to adjust in May, and the possibility of weak shock is greater.