Monthly Summary: The trend of the bearing steel market prices may be strengthened in January

Monthly Summary: The trend of the bearing steel market prices may be strengthened in January

Overview: From January to November 2022, the domestic production of bearing steel crude steel decreased by 7.34% year-on-year, and the output of bearing steel decreased by 5.12% year-on-year. Looking back at the bearing steel market in December, with the continuous optimization of epidemic prevention and control policies, the continuous optimization of entry and exit policies, and the release of stimulus from real estate demand, the overall market price fluctuated strongly. Up to now, the average price of domestic bearing round steel 50mm (continuous casting) is 5,415 yuan/ton, an increase of 35 yuan/ton from the end of November, and a month-on-month increase of 0.65%. It is expected that the market price of bearing steel in January may consolidate and strengthen.

1. Domestic production of bearing steel

(1) Production of bearing steel from January to November 2022: Both steel and crude steel decreased year-on-year

According to statistics from the Special Steel Association, from January to November 2022, the crude steel output of my country's major high-quality special steel enterprises was 4.0688 million tons, a decrease of 7.34% compared with the same period last year; The output of bearing steel products of the enterprise was 3.681 million tons, a decrease of 5.12% compared with the same period last year.

(2) The output of finished products of bearing steel manufacturers from January to November 2022: the output of steel mills decreased year-on-year

At present, the production enterprises with large bearing steel production are: CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Iron and Steel), Jiyuan Iron and Steel and Shagang (Northeast Special Steel, Yonggang), accounting for 63% of the total output . From January to November 2022, the overall output of bearing steel is decreasing. The output of steel plants such as Shigang, Laiwu Steel, Jiyuan, and Juneng has increased slightly compared with the same period last year. Xining, Beiman, Zhongtian, Xinggang, Bente, and South Steel, Shagang, Jianlong, CITIC and other steel mills have all reduced their output.

2. Domestic bearing steel market performance

In December, the market price of bearing steel showed a slight upward trend, and the market demand performance was not optimistic. With the outbreak of the epidemic in multiple regions for multiple periods of time, production, logistics and transportation have been blocked many times, and market demand has dropped to freezing point. Towards the end of the year, traders are obviously cautious in inventory control, and as prices rise, they are less motivated to stockpile for winter storage. This year's Chinese New Year is earlier, many terminal companies said that they will have an early holiday this year, and the shipping time of traders is shorter. It is expected that the bearing steel market as a whole may show a trend of consolidation and strengthening in January.

3. Relevant market information

(1) Raw material prices:

In December, the price of iron ore fluctuated upwards, and the current 62% Australian powder index is 117.3 US dollars/dry ton. Before the holiday, steel mills are expected to have little room for inventory replenishment, and the support for spot prices is weak. In January, it is expected that the price of iron ore will fluctuate and fall; the domestic scrap steel market will rise slightly, and the average price at the end of the month will be 2,661 yuan/ton. Most steel mills have started to raise prices to attract goods, the profits of electric furnace steel mills have expanded, and the shutdown and maintenance of electric furnace plants have been delayed. At present, the demand for scrap steel is relatively stable, which is conducive to the rise of scrap steel prices. Due to the approaching Spring Festival holiday, scrap steel prices have risen years ago The possibility has weakened, and it is expected that the steel scrap market price will fluctuate in January; the high-carbon ferrochromium market will run relatively strong, and the price at the end of the month will be 8,800 yuan/ton.

(2) Downstream industries

According to the statistical analysis of the China Association of Automobile Manufacturers, in November 2022, automobile production and sales will be slightly weak, with automobile production and sales completing 2.386 million and 2.328 million vehicles respectively, a month-on-month decrease of 8.2% and 7.1% respectively, and a year-on-year decrease of 7.9%. From January to November, the production and sales of automobiles were 24.628 million and 24.302 million respectively, a year-on-year increase of 6.1% and 3.3% respectively.

4. Conclusion

Looking back at the bearing steel market in December, under the premise of continuous optimization of epidemic prevention and control policies, market expectations were relatively strong, and market prices showed a slight rebound. It is expected that the price of bearing steel will fluctuate less in January, and the overall trend may be consolidated and strengthened.