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Bearings Production, Trading Price And Market Demand

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One might wonder what the Hubble telescope, a cycle, a Tesla Model S, and a weather satellite have in common? Bearings.

The use of bearings may well be traced back to 1324 BC, for example, some pictures on Egyptian pyramids indicate that tree trunks were used as ball bearings to carry heavy stones from one place to another.

Bearings are vital to every variant of moving machinery and as a result, the bearings market today is growing at a CAGR of 4.7% and is estimated to be worth $113 billion by the end of 2022.

Bearings Production and Trading Prices

bearing

Currently, the biggest bearings producers are Schaeffler Group (Germany), JTEKT Corp.(part of the Toyota Group, Japan), SKF AB (Sweden), NSK Ltd. (Japan), and NTN Corp (Japan).

The global bearings market is segmented on the basis of type of bearings (ball bearings, plain bearings, roller bearings, etc.), the outer diameter of bearings to be produced (>5mm, 6mm-10mm, 10-21mm, 22mm), intended use category (automotive, railways and aerospace, agriculture, electrical, mining), and on the base of the geographical regions where the end product will be put to use (North America, Asia Pacific, LAMEA, or Europe).

Further, there are numerous kinds of bearings depending on the intended end-use, for example, plain bearings, rolling element bearings, jewel bearings, deep groove ball bearings, miniature and small-size bearings, self-aligning ball bearings, angular contact ball bearings, fluid bearings, magnetic bearings, cylindrical roller bearings, tapered roller bearings, and thrust bearings. Depending on the consumer’s requirements and design-specific needs, a producer may manufacture customized bearings.

The factors affecting the market price of a bearings product are:

  • Raw materials account for 50-55% of the final cost, while the labor and energy costs contribute approximately 20% to 30% of the final price.
  • Additional costs like design costs, maintenance costs (lubrication cost, sealing cost), replacement costs, and costs incurred due to failure of bearings also affect the overall trading price of a bearings product.
  • Rolling element bearings are generally more expensive as compared to sleeve bearings and bushings when mass-produced. For specific designs produced in small quantities, slide bearings are the more expensive products. Boundary lubricated and dry film bearings are generally expensive as they use expensive proprietary raw materials.
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Bearings’ Market Demand

 

At the helm of 2019, the global bearing industry was valued at $34.4 billion and is expected to continue growing at a CAGR of 4.7%. Currently, Asia is the biggest consumer of bearings, responsible for more than 50% of the total global demand. Further, OEM industries use approximately 40% of all bearings produced globally while the industrial distribution market and after-market industries use 21% and 9% respectively, of the global bearings production output.

Let’s have a look at the rising trends in bearings market:

  • According to the new Occupational Safety and Health Administration (OSHA) guidelines, the acceptable noise limit in warehouses, factories, and distribution centers is 80 decibel. Since these environments are inherently noisy, it has become increasingly important to reduce noise at all levels, including in the bearings. Various bearing vendors like SFK AB, NSK Ltd., NTN Corp., have already launched products that produce 10-15% less noise as compared to before. This trend will gain momentum as more consumers move towards less noisy bearing products.
  • An increasing number of bearing vendors are using lighter and more durable materials for manufacturing bearing products to maximize durability and efficiency. Vendors are continuously trying to optimize production and efficiency through the use of technological advancements like the Internet of Things, Artificial Intelligence, and intelligent sensors.
  • Considering the current surge in demand for electric vehicles (EV), it is apparent that there would be a surge in demand for bearings to be used in these vehicles. While an EV uses a lesser number of bearings as compared to a fossil fuel-run vehicle, the difference becomes negligible when offset against the demand quantity for the electric vehicles.
  • Owing to the increased demand for electric vehicles, increasing investment in mining endeavours, rising interest in alternative power solutions like windmills, eco-efficient electric batteries; a consequent rise in the use of heavy machinery is palpable. Bearings play an important role both in the manufacturing machinery and the machinery to set up these solutions themselves. Hence, it is only a matter of time before the demand for bearings reaches record highs.
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Challenges:

  • Counterfeit Products: The biggest challenge the bearing industry faces today is counterfeit products. Such products use lower grade raw materials and their manufacturing process usually doesn’t adhere to standards of production. The fake products are much cheaper than value products.
  • Increasing Pressure to Improve Efficiency: Since there is no technological advantage bearing vendors can have over competitors, aggressive pricing and cost structure optimization has led to a race to produce lighter, quieter, smaller, and more durable bearing variants.

In Conclusion

The global bearing market looks positive and has all the markers of growth. While the competition amongst vendors would be high, opportunities available have room for everyone’s growth.

However, regulation authorities must develop and implement more stringent standards to put an end to counterfeit bearing variants. Counterfeit bearings not only reduce a machine’s lifespan but also put the lives of those operating it at risk.

 

 

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