Monthly data: The bearing steel market oscillated at a high level in February

Monthly data: The bearing steel market oscillated at a high level in February

Overview: In 2020, the output of domestic crude steel bearing steel will increase by 12.50% year-on-year, and the output of bearing steel will increase 8.89% year-on-year. Looking back at the bearing steel market in January, under the support of high costs and demand, the overall market price fluctuated and strengthened. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 5769 yuan / ton, an increase of 105 yuan / ton from the end of December, a month-on-month increase of 1.85%. Recently, steel mills have received good orders, especially some steel mills’ export orders have continued to increase slightly. Due to cost promotion and overall positive market mentality, the bearing steel market is expected to fluctuate at a high level in February.

1. Domestic production of bearing steel

(1) Bearing steel output in 2020: Crude steel and steel both increase year-on-year

According to statistics from the Special Steel Association, in 2020, my country's main high-quality special steel enterprises will produce 3,973,600 tons of crude steel bearing steel, an increase of 12.50% compared with the same period last year; in 2020, my country's main high-quality special steel enterprises will produce 3,494,100 tons of bearing steel. , An increase of 8.89% compared with the same period last year, as shown in Figure 1.

(2) The output of finished products of bearing steel production enterprises in 2020: 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. The overall output of bearing steel will increase in 2020. The output of Beiman, Benxi Iron and Steel, Shagang, Nangang, Jianlong, Juneng, CITIC Special Steel, Jiyuan and other steel plants have increased compared with the same period last year. Only Xinggang, Qilu, The output of Xining, Shigang and other steel plants decreased slightly.

2. Performance of the domestic bearing steel market

The average domestic bearing steel price fluctuated and strengthened in January, and the market sentiment was positive. According to surveys, steel mills received good orders in February, with a high proportion of direct supply orders, and some steel mills' export orders continued to increase slightly. In terms of the market, traders are mostly bullish on the post-holiday market, but they are more cautious in operation, as the subsequent transactions are likely to weaken as the Spring Festival approaches. In view of the fact that the overall cost of market arrival resources after the year has also increased significantly compared with the same period in previous years, under the support of high costs, it is expected that the price of bearing steel in February may run at a high level.

3. Relevant market information

(1) Raw material price:

The iron ore market price fluctuated at a high level in January. At the end of the month, the forward spot price of iron ore was US$157.8/ton. The overall demand is still at a relatively high position, especially before the Spring Festival, the replenishment of steel mills has greater support for iron ore demand. Although the supply side continues to be affected by seasonal factors, the further weakening of demand and the continued accumulation of port inventories are expected to show a weaker fluctuation trend in February; the overall performance of the general carbon scrap market is more volatile, with the monthly average price at 2777 Yuan / ton. The overall performance of the scrap steel market is expected to consolidate in February; the market price of high-carbon ferrochrome has skyrocketed, with the price at 8,617 yuan/ton at the end of the month. In January, the domestic high-carbon ferrochrome output was 424,000 tons, a decrease of 15% from the previous month. Among them, the Inner Mongolia area decreased by 79,000 tons, and the supply gap in February is expected to continue or even expand.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in December 2020, the overall situation of automobile production and sales remained stable, with a slight decrease in output month-on-month, a small increase in sales volume, and continued growth year-on-year. In December, automobile production and sales reached 2.840 million and 2.831 million, respectively, with output falling 0.3% month-on-month, sales increased 2.1%, year-on-year growth of 5.7% and 6.4%, and the growth rate was slower than last month.

4. Conclusion

Given that the cost of steel mills is still high and the pressure on social inventories has decreased compared with previous years, it is expected that the bearing steel market in February may fluctuate at a high level.