Monthly data: The upward trend of the bearing steel market will continue to rise in January

  Monthly data: The upward trend of the bearing steel market will continue to rise in January 

Overview: From January to November, the domestic crude steel production of bearing steel increased by 10.11% year-on-year, and the production of bearing steel increased by 7.37% year-on-year. Looking back at the bearing steel market in December, supported by high costs and demand, the market as a whole showed a sharp upward trend. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 5664 yuan/ton, an increase of 551 yuan/ton from the end of October, an increase of 10.78% month-on-month. At present, the demand for downstream terminals such as automotive bearings, metallurgical bearings, and engineering machinery bearings is relatively good, and the market is still enthusiastic about rising. However, merchants’ fear of heights has become more and more obvious as prices have risen. Given that the low-priced resources in the previous period have basically been sold out, the cost of delivery has been high recently. It is expected that the price of bearing steel market in January still has room to rise, but the increase is limited.

1. Domestic production of bearing steel

(1) January-November output: crude bearing steel and steel both increased year-on-year

According to statistics from the Special Steel Association, my country’s main high-quality special steel enterprises produced 3,557,600 tons of crude steel bearing steel from January to November 2020, an increase of 10.11% compared to the same period last year; from January to November 2020, my country’s main high-quality special steels The company’s bearing steel output was 3,150,400 tons, an increase of 7.37% compared to the same period last year, as shown in Figure 1.

(2) The output of finished products of bearing steel production enterprises from January to November: the output of steel mills increased year-on-year

It can be seen from Figure 2 that the current largest output of bearing steel are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Zhongtian and Benxi Steel, accounting for 62% of the total output. From January to November 2020, the overall output of bearing steel increased. The output of Beiman, Benxi Iron and Steel, Shagang, Juneng, Jiyuan, Jianlong, and CITIC Special Steel all increased compared with the same period last year. Xinggang, Qilu, The output of Xining, Laiwu Steel, Shigang and other steel plants decreased slightly.

2. Performance of the domestic bearing steel market

The market price of bearing steel continued to climb in December, and the demand was good. From the perspective of the supply side, only a few steel mills have undergone minor maintenance since December, and the supply of bearing steel will not decrease significantly for the time being. It is also reported that the steel mills received good orders in January. It is expected that the ordering cost in January will hardly fall, and it will still rise.

3. Relevant market information

(1) Raw material price:

The iron ore market price continued to climb in December. At the end of the month, the Mysteel iron ore forward spot price index was US$159/ton, up 26.9 US dollars/ton from the beginning of the month. Under the influence of the continued strengthening of domestic demand and the expected recovery of overseas demand, the price moving average has moved up again, and the main disk of Liantie has set a new high since 2013; the general carbon scrap market is operating strongly, the fundamentals of supply and demand are still tight, and the average price at the end of the month At 2667 yuan/ton. The market price of high-carbon ferrochrome continues to rise, and the price at the end of the month is 6378 yuan/ton.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in November 2020, automobile production and sales continued their growth momentum, with both production and sales hitting new highs during the year. From January to November 2020, the production and sales of automobiles were 22.372 million and 22.470 million, down 3% and 2.9% year-on-year, respectively. The decline continued to narrow by 1.6 and 1.8 percentage points from January to October.

4. Conclusion

The market price of bearing steel rose sharply in December, and the demand was fair. From the perspective of the circulation situation, the low-cost resources in the early stage are basically sold out, and the cost of the recent arrival is high, and the later ordering costs are difficult to fall. It is expected that the price of bearing steel market in January still has room to rise, but the increase is limited.