Leading Bearing Steel Manufactures In China Reached An Agreement On Self-discipline
Resource from:
31 Oct,2005
Six leading bearing steel enterprises in China attended a conference hosted by SSEA （Special Steel Enterprise Association Of China） on Oct27. These six enterprises are: Dongbei Special Steel Group (DSSG), Baosteel Special Steel Group (BSSG), Xingcheng Special Steel Group (XSSG), Hubei Xin Yegang Co.,Ltd(HXYC), Jiangsu Xigang Steel Group(JXSG), Zhenzhou Yongtong Special Steel(ZYSS)，which hold much larger market shares. The total output of bearing steel of these six enterprises reached 1,230,000 tons in the first nine months, which occupied 84.07% of bearing steel market. The output of bearing steel material was up to 1,130,000tons, sharing 84.62% in the market.
Advisor Wu Xichun pointed out that the positive environment for steel development has not been changed. It is reflected from the current steel market that the supply greatly exceeds the demand, especially the common steel.
The daily output of steel was 81,000 tons in January nationwide, but it was up to 1,010,000 tons in September. The average daily output was 858,700 tons in the first quarter, and second quarter 949,000 tons, while the third quarter 978,800 tons.
The steel resource increased by 12.27% in the first six months nationwide, but during the following three months 20%. Meanwhile, the output of pig iron increased by 31%, more than the growing of steel, while the increasing of steel material is more than steel. What's more, the enterprises failed to analyze the domestic steel market in correct way. As a result, they imported large amount of steel during the period of domestic steel inflation.
A calm attitude toward the increasing of steel resource is required. No matter how large the steel demand is, it can't afford to experience the steel inflation. The fact that demand exceeds the supply in the market will result in the overstock and then price declination and less profit.
The declination of export and the output of these oversupplying products play an important role in the recovery of market. Comparing with common steel, high-tech special steel is more specialized and the imported and exported channel is different. The import is lower less than the export in last November and December. But in this September, the import hit 2,490,000 tons while the export reduced 360,000 tons. And the net import was up to 1,130,000 tons comparing with the 860,000 tons in the first six months. In August, the increase of import panel is 15.8%. But in the first nine months, the alloy rod was down 4% from last year, hot rolled rod was down 5.7% and cold rolled rod 3.1%, alloy bar 6%.
The supply and demand still balanced although there is some oversupply of certain special steel. So the special market is different form that of common steel. Currently, quality improvement rather than price competition is required for special steel. The price difference lies in the quality and variety. Henceforth, there will not be another big rise in steel output.
The items of the agreement are described as follow:
I. Output restriction: the output will be cut by 12500 tons in November and December.
DSSG 3000tons/month; ZYSS 3000tons/month; BSSG 2000tons/month; XSSG 2000tons/month;
II. Cost: the average cost of continuous casting and rolling material of bearing steel is about 4000 Yuan / ton.
III. Self-discipline: regulating and stabilize selling process; prohibiting disguising price cut.
IV. Develop the technology and improve the quality of bearing steel. Make sure the oxygen Tension less than 10ppm.
V. Expand export instead of import and develop the high-end product.
These six enterprises show that the agreement will be published through media to be supervised and stabilize the market.
Advisor Wu Xichun pointed out that the positive environment for steel development has not been changed. It is reflected from the current steel market that the supply greatly exceeds the demand, especially the common steel.
The daily output of steel was 81,000 tons in January nationwide, but it was up to 1,010,000 tons in September. The average daily output was 858,700 tons in the first quarter, and second quarter 949,000 tons, while the third quarter 978,800 tons.
The steel resource increased by 12.27% in the first six months nationwide, but during the following three months 20%. Meanwhile, the output of pig iron increased by 31%, more than the growing of steel, while the increasing of steel material is more than steel. What's more, the enterprises failed to analyze the domestic steel market in correct way. As a result, they imported large amount of steel during the period of domestic steel inflation.
A calm attitude toward the increasing of steel resource is required. No matter how large the steel demand is, it can't afford to experience the steel inflation. The fact that demand exceeds the supply in the market will result in the overstock and then price declination and less profit.
The declination of export and the output of these oversupplying products play an important role in the recovery of market. Comparing with common steel, high-tech special steel is more specialized and the imported and exported channel is different. The import is lower less than the export in last November and December. But in this September, the import hit 2,490,000 tons while the export reduced 360,000 tons. And the net import was up to 1,130,000 tons comparing with the 860,000 tons in the first six months. In August, the increase of import panel is 15.8%. But in the first nine months, the alloy rod was down 4% from last year, hot rolled rod was down 5.7% and cold rolled rod 3.1%, alloy bar 6%.
The supply and demand still balanced although there is some oversupply of certain special steel. So the special market is different form that of common steel. Currently, quality improvement rather than price competition is required for special steel. The price difference lies in the quality and variety. Henceforth, there will not be another big rise in steel output.
The items of the agreement are described as follow:
I. Output restriction: the output will be cut by 12500 tons in November and December.
DSSG 3000tons/month; ZYSS 3000tons/month; BSSG 2000tons/month; XSSG 2000tons/month;
II. Cost: the average cost of continuous casting and rolling material of bearing steel is about 4000 Yuan / ton.
III. Self-discipline: regulating and stabilize selling process; prohibiting disguising price cut.
IV. Develop the technology and improve the quality of bearing steel. Make sure the oxygen Tension less than 10ppm.
V. Expand export instead of import and develop the high-end product.
These six enterprises show that the agreement will be published through media to be supervised and stabilize the market.
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
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