Bearings worldwide were doing significantly
better. Orders were increasing globally and were forecast to grow 6.5
percent per year through 2005 to $42 billion. With supply levels remaining
high worldwide, bearing prices overall were stable and not expected to rise
in 2003. Conversely, prices for imports were expected to increase in 2003.
As bearings from China came into the United States, selling at below market
values, the federal government has
levied anti-dumping duties of up to 59.3 percent. Lead times for all
bearings continued to fall 10 to 20 percent with 60 percent of buyers
receiving product within a week, according to one survey. Average lead time
was about 2.6 weeks, down 19 percent from one year ago.
Supply and demand for different bearing
designs - ball, roller, etc. - can vary based primarily upon the types of
applications most prevalent in the country's industrial sector. But because
each of the major anti-friction bearing designs (i.e., ball and roller, with
other types tending to be derived from the major designs) is used in such a wide and diverse array of settings,
most countries that comprise significant bearing markets (i.e., over about
$100 million per year in annual sales) utilize both types in relatively
While the industrialized nations tend to
exhibit the largest and most mature (and thus most cyclical) bearings
markets, the fastest growing markets are usually found within the developing
nations of Asia, Latin America and (to a lesser extent) Africa/Mideast. Many
such countries have been reforming and liberalizing their economies in
recent years, in order to attract external investment capital and develop
and expand their industrial sectors.
Industrial machinery applications dominate the
world bearings markets, accounting for over half of total global demand.
Industrialization programs in developing countries tend to involve
substantial amounts of such machinery, and while in many cases these
countries import machinery already incorporating bearings, the aftermarket
tends to be sizable. The motor vehicle sector comprises the second largest
application for anti-friction bearings in value terms, although it is far
smaller than its industrial machinery counterparts
Investments and implementation of new
production technologies continually improve productivity. With very rapid
scientific advances, the bearing technology cycle has been squeezed into
shorter periods so that productivity has been growing faster than bearing
end-markets. This puts continuous pressure on the industry to consolidate.
The entry of China, for example, into world
markets has not only created additional capacity, but also lowered prices of
some bearings to levels not seen since the 1960s.
The China factor has also cut into some of
Japan's exports, thus impacting Japan's incountry capacity (as Thailand and
Singapore did with small ball bearings) and the United States by lowering
general price levels. Eastern Europe, India, and other areas are developing
in a similar pattern.
In addition, bearing materials and bearing
quality have improved and extended bearing life. Longer bearing life reduces
the demand for replacement bearings, and thereby, further contributes to
surplus capacity. Lastly, the closed Japanese market contributes to
overcapacity in slow economic times elsewhere in the world.