Monthly Summary: The market price of bearing steel may be weak in May

Monthly Summary: The market price of bearing steel may be weak in May

Overview: From January to March 2025, the crude steel production of domestic bearing steel decreased by 8.93% year-on-year, and the production of bearing steel decreased by 2.67% year-on-year. Looking back at the market situation in April, the demand side saw a seasonal rebound in terminal industries such as machinery and automobiles, with an increase in orders for bearing companies compared to the previous month. However, due to financial pressure from terminal customers, procurement remained mainly based on demand, making it difficult to significantly increase volume. As of now, the absolute price index of domestic bearing steel is 4922 yuan/ton, a decrease of 20 yuan/ton or 0.4% from the beginning of the month. With macroeconomic policies aimed at stabilizing growth or boosting market confidence, but actual transmission still takes time, it is expected that the price of bearing steel market in May may experience weak consolidation.

Ⅰ Domestic production of bearing steel

1. Bearing steel production from January to March 2025: crude steel and steel mills decrease year-on-year

According to statistics from the Special Steel Association, the crude steel production of bearing steel by major special steel enterprises in China from January to March 2025 was 1.2624 million tons, a decrease of 8.93% compared to the same period last year; The production of bearing steel by major special steel enterprises in China in January and February 2025 was 1.1108 million tons, a decrease of 2.67% compared to the same period last year.

2. Bearing steel production in April 2025: Steel production increases month on month

According to the 21 samples collected by the Bearing Steel Research Group, the production of bearing steel by major special steel enterprises in China in April 2025 was 400900 tons. Among them, there are 331800 tons of rods, accounting for 82.76%; 69100 tons of wire, accounting for 17.24%.

According to the research sample, it can be seen that the number of bearing steel bars and wires increased in April compared to the previous month. The total amount of bearing steel increased by 2.91% month on month, rod increased by 3.38%, and wire increased by 0.73%.

3. From January to March 2025, the output of finished products of various bearing steel production enterprises: the total output 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 Steel, and Juneng, accounting for 68% of the total output. The overall production of bearing steel will slightly decrease from January to March 2025. Steel mills such as CITIC, Benxi Iron and Steel, and Yonggang have increased their production compared to the same period last year, while steel mills such as Juneng, Jianlong Beiman, and Dongte have all experienced a decline in production.

Ⅱ Performance of domestic bearing steel market

In April, the bearing steel market showed a pattern of "supply recovery and weak demand", with obvious pressure on prices. The downward price of bearing steel was between 10-80 yuan/ton. In the short term, the contradiction between high inventory and low purchase volume still exists. Merchants are optimistic about the future market and actively sell. With the recent fluctuation and upward trend of raw material ferrochrome prices, cost support is relatively strong. It is expected that the price of bearing steel in May may experience weak consolidation.

Ⅲ Related market information

1. Raw material prices

The Mysteel 62% Australian Pink Forward Price Index is $198.95 per dry ton, a decrease of $4.85 per ton or 4.67% from the beginning of the month. Looking ahead to May, based on seasonal patterns and recent weather conditions, it is expected that the global iron ore transportation volume will slightly rebound in the next period; In terms of demand, it is expected that the average iron water production will increase slightly next Sunday; In terms of inventory, it is expected that the overall unloading and warehousing volume will be lower than the outbound volume next week, and the inventory at Port 47 may be slightly reduced in the next period. Overall, it is expected that iron ore prices will fluctuate in the short term.

The current spot price of high carbon ferrochrome is 8300 yuan/ton, an increase of 400 yuan/ton or 3.8% from the beginning of the month. On April 25th, the spot price of high carbon ferrochrome remained stable, with coke prices, national freight rates, and electricity rates all operating steadily. The spot price of chromite ore increased slightly by 0.5 yuan/ton, and the spot cost of high carbon ferrochrome increased by 4-35 yuan/50 basis tons. Steel recruitment stimulated chrome ore traders to slightly increase their quotes, and the cost of ferrochrome rose slightly. It is expected that the cost of high carbon ferrochrome will fluctuate at a high level.

The current price of scrap steel is 2050 yuan/ton, a decrease of 60 yuan/ton or 2.84% from the beginning of the month. Recently, there has been an increase in demand for steel, and inventory continues to be depleted. Coupled with material discounts, most steel companies have performed well in profitability, driving the production enthusiasm of steel mills. At the same time, the increase in coke prices has raised the cost of molten iron, and the cost-effectiveness advantage of scrap steel has slightly returned, both of which are favorable for the strengthening of scrap steel prices. Moreover, driven by the dual promotion of May Day inventory replenishment and macro speculation, supply merchants are eagerly anticipating price increases and reluctant to sell. Most steel companies are raising prices to attract more goods due to insufficient inventory turnover. However, the steel meter needs to be synchronized with the production of molten iron, and some steel companies have maintenance plans after the holiday, which may reduce the consumption of scrap steel. Therefore, in the short term, domestic scrap steel may stabilize after rising before the May Day holiday, but it may be difficult to continue the upward trend after the holiday.

2. Downstream industry

According to data released by the China Association of Automobile Manufacturers, in March, the production and sales of automobiles reached 3.006 million and 2.915 million respectively, an increase of 42.9% and 37% month on month and 11.9% and 8.2% year-on-year, respectively. From January to March, the cumulative production and sales of automobiles reached 7.561 million and 7.47 million units, respectively, an increase of 14.5% and 11.2% year-on-year. The China Association of Automobile Manufacturers (CAAM) stated that in the first quarter of 2025, passenger cars will continue to show a good trend, while the commercial vehicle market will show a trend of recovery; The production and sales of new energy vehicles continue to grow rapidly, providing strong support; The export of complete vehicles has maintained steady growth, with a particularly significant increase in the export of new energy vehicles; Chinese brands continue to rise, with a high proportion of sales. It is expected that the automobile market will continue to show a stable and positive development trend in the later stage.

Ⅳ Summary

In terms of demand, industries such as automobiles and machinery have entered the traditional peak season, but due to the pressure of terminal funds, procurement is still mainly based on demand, making it difficult to significantly increase volume. On the supply side, steel mills' production remains stable, but some companies' maintenance in May may affect local supply, but overall inventory pressure is still acceptable. In terms of the market, as terminals remain cautious and maintain a "small batch, multiple frequency" strategy, it is difficult to form sustained volume trading in the market. In addition, traders choose to lower prices to promote transactions in order to increase shipments, and the overall market adopts a wait-and-see attitude towards short-term trends. Overall, it is expected that the market price of bearing steel will experience weak consolidation in May.