en English

Steering tie rod end price forecast of 2022

For most of Chinese auto parts producers and foreign importers, 2021 was a thrilling year. We experienced materials and transportation cost repeatedly crazy increase in a short time, and unexpected long delivery schedules.  

How will the price of auto parts in 2022 will go? Can we predict it through the the hints of last 3 years’ records?

1. Know the major materials which decides the price

Firstly, let us take the tie rod end as an example to review the structure of the car steering and suspension parts to have an idea of the major materials which decides the price.

Metal on Metal structure tie rod end
Nylon structure tie rod end

There are two structures of the tie rod ends. One is the metal on metal, the other is with plastic bearing to hold the ball stud. Both them have the necessary materials 40cr, 45 steel and rubber dust cover. They decides the total price largely.

2. Go over the 3 years’ materials history cost

Let us go over the materials cost in the past three years and their trends.

2.1. 40Cr

In 2019, 40Cr price starts at CNY4,200 a tonne in 2019, and totally keeps stable at around 4,200 a tonne. In 2020, prices go sharply in December up to CNY5,100 a tonne. The increase keeps on going in 2021, hit the highest CNY6,450 a tonne in May and fell down to CNY5,200 a tonne (increased at average 24% in the past 3 years).

40Cr prices comparison 2019 vs 2020 vs 2021 in China

2.2. 45 steel

45 steel has the similar experenice as the 40Cr in the past 3 years.

45 steel history price 2019 vs 2020 vs 2021

2.3. Steel price history and trend in the last 5 years

Steel rebar futures keeps a total slightly increase in the past 5 years, and it is extremely turbulent in 2021, having touched an over 5-year hight at CNY 6,000 a tonne in May then fell to below CNY 4,600 a tonne at the end of December, amid weak demand from China due to a crisis in the property sector, chip shortages, and slower activity from other sectors due to frequent power shortages. In addition, many stainless-steel plants in China are reducing production for routine maintenance or to save costs in both December and January, with output expected to drop by 97,000 mt in December and by 290,000 mt in January.

Steel prices comparison in the last 5 years

2.4. Rubber price history

After almost 3 years price slightly up and downs at CNY33,000 a tonne, in December of 2021, the price touchs an almost 3-year high of CNY49,000 a tonne, hit for an 49% yearly increase in 2021. Continuing standoff in the auto sector due to chip shortages and restrictions imposed especially across Europe and top buyer China against the rapid spread of the Omicron coronavirus variant heavily weighted on the metal’s appeal. Still, increasing demand from China ahead of the Lunar New Year should provide some support at the start of 2022.

Neoprene price history and trends

3. Currency exchange rate USD to CNY Chart

Let us see the change of 5 years currency exchange rate firstly

5 years Currency exchange rate chart (USD : CNY)

In the last 5 years, the offshore yuan jumps largely by 15%, the highest and lowest is 7.17 and 6.26 separately per US dollar. The Chinese currency is set for a second straight year of gains in 2021, on course to rise about 2.5% against the dollar. That would make it the best performing emerging market currency in 2021, underpinned by robust exports, a growing trade surplus and ample onshore dollar liquidity.

4. Forecast of 2022 for the car steering and suspension parts

The price of auto parts are affected by a lot of factors, such as materials cost, package cost, labor cost, currency, economy, politics, international relationships, environments, stock and market demands etc. Here, we would like try to forecast from the materials and currency sides only.

4.1. Steel price forecast (take steel rebar as an example)

Steel is expected to trade at 4534.72 Yuan/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 4230.27 in 12 months time.

4.2. Rubber price of dust cover forecast

Take international rubber (Japanese) as an example, it is expected to trade at 265.26 JPY/kg by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 316.26 in 12 months time.

4.3. Currency USD to CNY forecast

The Chinese Yuan is expected to trade at 6.39 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 6.45 in 12 months time.

4.4. Summary

Viewing above factors, we believe the car steering parts tie rod end, ball joint, stabilizer links, cross rod etc will keep price stable than the past year 2021.

We welcome you to leave us comments below this article.

Facebook
Twitter
LinkedIn

Leave a Reply

Your email address will not be published.

four × three =

Sign up and get

10% Off

On all flooring services

Ask For A Quick Quote

We will contact you within 1 working day, please pay attention to the email with the suffix “@vvautoparts.com”