Monthly Summary: The market price of bearing steel may first suppress and then rise in February

Monthly Summary: The market price of bearing steel may first suppress and then rise in February

Overview: From January to December 2024, the crude steel production of domestic bearing steel increased by 4.32% year-on-year, and the production of bearing steel increased by 7.37% year-on-year. Looking back at the market situation in January, there was a decrease in market demand before the holiday, and spot prices were under pressure to decline. As of now, the average price of 50mm (continuous casting) bearing steel in China is 4960 yuan/ton, a decrease of 30 yuan/ton or 0.6% from the beginning of the month. The terminal started slightly slowly in early February, and the demand side performance may be relatively weak. However, the market may gradually become active after the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) Festival, and demand will gradually release. It is expected that the market price of bearing steel in February will rise first and then decline.

Ⅰ Domestic production of bearing steel

1. Bearing steel production from January to December 2024: year-on-year growth in crude steel and steel mills

According to statistics from the Special Steel Association, the crude steel production of bearing steel by major special steel enterprises in China from January to December 2024 was 4.3591 million tons, an increase of 4.32% compared to the same period last year; The production of bearing steel by major special steel enterprises in China from January to November 2024 was 4.9699 million tons, an increase of 7.37% compared to the same period last year.

2. Bearing steel production in January 2025: Steel production decreases month on month

According to the 21 samples collected by the Bearing Steel Research Group, the production of bearing steel by major special steel enterprises in China in January 2025 was 374900 tons. Among them, 305500 tons of rods accounted for 81.49%; 69400 tons of wire, accounting for 18.51%.

According to the research sample, it can be seen that the production of bearing steel bars and wires in January decreased compared to the previous month. The total amount of bearing steel decreased by 0.95% month on month, rod decreased by 0.59%, and wire decreased by 2.53%.

3. From January to December 2024, the finished product output of various bearing steel production enterprises: the total output of steel mills increased slightly

At present, the production enterprises with large output of bearing steel are CITIC Special Steel (Xingcheng Special Steel, Daye Special Steel, Qingdao Special Steel), Jiyuan Steel, and Juneng, accounting for 65% of the total output. The overall production of bearing steel increased from January to December 2024, with production from steel mills such as CITIC, Juneng, Nangang, Jianlong Beiman, Laiwu Special Steel, and Magang increasing compared to the same period last year. Production from steel mills such as Jiyuan, Zhongtian, Dongte Shares, Shigang, Benxi Iron and Steel, and Xinggang all declined.

Ⅱ Performance of domestic bearing steel market

The market price of bearing steel remained weak in January. The prices of raw materials are running strong, coupled with the Spring Festival holiday and weak market demand, resulting in a simultaneous weak trend in the prices of bearing steel. In February, the manufacturing industry will gradually resume work and production, which will drive the slow release of demand for bearing steel. It is expected that the price of bearing steel will first suppress and then rise.

Ⅲ Related market information

1. Raw material prices

Mysteel's 62% Australian powder forward price index is 104.8 US dollars per dry ton, an increase of 3.7 yuan per ton from the beginning of the month, an increase of 3.87%. Looking ahead to February, China's iron ore supply and demand may show a weak supply and strong demand situation. On the supply side, it is expected that the shipment volume of iron ore in February will increase month on month and decrease year-on-year; Based on the comprehensive analysis of previous shipments, floating inventory, and arrival ratios, the arrival volume at Port 47 in February decreased compared to the same period last month. On the demand side, the production of molten iron is expected to rebound in February, accompanied by steel mills replenishing their inventory after the holiday and maintaining a high level of port transportation. Overall, it is expected that the port inventory of iron ore in the Chinese market will decrease slightly in February 2025. The price of imported iron ore is running strong.

The current spot price of high carbon ferrochrome is 7200 yuan/ton, an increase of 100 yuan/ton or 1.4% from the beginning of the month. On January 27th, the spot price of high carbon ferrochrome remained stable, with chrome ore prices, coke prices, national freight and electricity prices all operating steadily. The spot cost of high carbon ferrochrome was temporarily stable. At present, the chrome ore market is flat with stable prices, and it is expected that the cost of high carbon ferrochrome will remain stable in the short term.

The current price of scrap steel is 2170 yuan/ton, unchanged from the beginning of the month. From the perspective of inventory, whether it is steel mills or bases, the decrease in winter storage inventory and the increase in demand for steel scrap replenishment after the holiday have provided some support for scrap steel prices. With the arrival of the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival), the electric arc furnace will also resume production, and the recovery of scrap demand will drive the scrap price up. However, considering the possibility of lower than expected steel demand and the greater production pressure on steel mills in the later stage, the purchase price of scrap steel will be lowered. Overall, it is expected that the scrap steel market will rise first and then decline in February.

2. Downstream industry

According to data released by the China Association of Automobile Manufacturers, the production and sales of automobiles reached 3.366 million and 3.489 million respectively, a decrease of 2.1% compared to the previous period, and a sales growth of 5.2% compared to the previous period. From January to December, China's automobile production and sales reached 31.26 million and 31.426 million respectively, an increase of 5% and 4.6% year-on-year. Among them, the production and sales of passenger cars continue to grow, playing a positive role in stabilizing the basic consumption of automobiles. The commercial vehicle market has shown weak performance, with production and sales falling short of the expected 4 million units. New energy vehicles continue to grow rapidly, with annual production and sales exceeding 10 million units for the first time, accounting for over 40% of sales, ushering in a new stage of high-quality development. Automobile exports have reached a new level, providing diversified consumption choices for global consumers. It is expected that the automobile market will continue to show a stable and positive development trend in 2025, and automobile production and sales will continue to grow.

Ⅳ Summary

At present, most traders are starting construction on the seventh day of the first lunar month, while terminal start-up may be slightly slow. In early February, the release of market demand was slow, making it difficult to form strong support for prices. In late February, the resumption of work and production in the manufacturing industry accelerated, gradually releasing demand for bearing steel. Coupled with positive macro expectations and increased market confidence, it is expected that the market price of bearing steel in February will first suppress and then rise.