Monthly Summary: The market price of bearing steel may remain stable with a slightly stronger trend in December

Monthly Summary: The market price of bearing steel may remain stable with a slightly stronger trend in December

Overview: From January to October 2023, the domestic crude steel production of bearing steel increased by 5.82% year-on-year, and the production of bearing steel increased by 3.34% year-on-year. Looking back at the market situation in November, the price of bearing steel fluctuated and became stronger, with high prices of raw materials fluctuating. The production of finished products increased year-on-year, and market transactions slightly improved compared to October. In terms of steel mills, based on changes in the raw material and specialty steel market, some steel mills have cumulatively increased the price of bearing steel varieties by 100-300 yuan/ton. As of now, the average price of domestic bearing steel 50mm (continuous casting) is 5160.5 yuan/ton, an increase of 90 yuan/ton compared to the beginning of the month. Overall, it is expected that the bearing steel market prices will remain stable and slightly strong in December.

I Domestic production of bearing steel

1. Bearing steel production from January to October 2023: year-on-year growth in crude steel and steel mills

According to statistics from the Special Steel Association, from January to October 2023, the crude steel production of bearing steel by China's major special steel enterprises was 3.908 million tons, an increase of 5.82% compared to the same period last year; From January to October 2023, China's main premium steel enterprises produced 3.464 million tons of bearing steel, an increase of 3.34% compared to the same period last year.

2. From January to October 2023, the finished product production of bearing steel production enterprises: the total production of steel mills increased slightly

At present, the production enterprises with large output of bearing steel are CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Special Steel), Jiyuan Iron and Steel, and Juneng, accounting for 58% of the total output. From January to October 2023, the overall production of bearing steel increased. Steel mills such as Juneng, Nangang, Zhongtian, and Shigang saw a slight increase in production compared to the same period last year. Steel mills such as CITIC Special Steel, Dongte Group, Jianlong Beiman, Jiyuan, Jiangsu Yonggang, and Xining Special Steel all saw a decline in production.

II Performance of Domestic Bearing Steel Market

In November, the price of bearing steel in the market fluctuated upwards, and market sentiment slightly improved. Overall, it is expected that the price of bearing steel in the market will remain stable and slightly strong in December.

III Related market information

1. Raw material prices

As of November 24th, the 62% Australian powder forward spot price index for iron ore was $134.85 per dry ton, up 9.19% from October. In November, iron ore prices continued to rise, with forward spot prices rising more than port spot prices. As of November 28th, the spot price of high carbon ferrochrome has remained stable, while the prices of chrome ore, national freight and electricity costs have remained stable. The price of coke powder has decreased by 20 yuan/ton, the price of metallurgical coke has increased by 100 yuan/ton, and the spot smelting cost of high carbon ferrochrome production has increased by 31-32 yuan/50 basis tons. It is expected that the cost of high carbon ferrochrome will remain stable in the short term.

2. Downstream industries

According to data released by the China Association of Automobile Manufacturers, in October 2023, the production and sales of automobiles reached 2.891 million and 2.853 million respectively, with a month on month increase of 1.5% in production and a month on month decrease of 0.2% in sales, and a year-on-year increase of 11.2% and 13.8%, respectively. From January to October 2023, the production and sales of automobiles reached 24.016 million and 23.967 million respectively, an increase of 8% and 9.1% year-on-year. According to historical data, October 2023 reached a new historical high for the same period in that month. The car market continues to heat up, with car sales remaining largely unchanged from September, slightly decreasing month on month and showing double-digit growth year-on-year.

IV Summary

In November, the price of bearing steel in the market fluctuated and became stronger, with a slight improvement in market fundamentals. It is expected that the price of bearing steel in the market will stabilize and become stronger in December.