LONDON: Black Sea region billet prices were little changed this week as political unrest in the Middle East and North Africa kept demand low from key buyers while data showed a rise in production.
Black Sea billet sold at $585-605 a ton free-on-board (fob) Russia and Ukraine, similar to last week’s level, traders said.
"I think buyers are very cautious. They expect a correction, so they are waiting," said a UK-based billet trader.
"The Middle East is still struggling (with political unrest), but I don’t think prices will fall below $580 fob level."
Violence in North Africa and the Middle East in the past few months has depressed investment in the area and reduced demand for steel billet, a semi-finished product mainly used for construction.
"Overall I think people are not particularly positive," said a second steel trader. "Things are quite gloomy and it is going to be a quiet period with the Easter holiday coming up."
Rising steel production has been weighing on prices.
Turkish crude steel output in March rose 25 percent compared with the same month last year to 2.7 million tons.
Global crude steel production hit a new monthly record of 129.3 million tons in March, up 7 percent from March 2010, according to data released this week from the World Steel Association (Worldsteel).
Turkish producers achieved billet sales at $620 per ton fob this week, similar to last week’s level, traders said.
Some Turkish mills have cut production in the past few weeks, however, as their profits have been squeezed amid raw material costs and falling finished steel prices.
Deep sea cargoes from the United States and the European Union of steel scrap — a key steelmaking ingredient — sold at $428-445 per ton cost-and-freight (c&f) Turkey, little changed from last week.
The mills that could switched from making steel long products to steel flat products
Prices of rebar — a finished long steel product used for construction — were little changed from last week at $645-660 per ton fob.
On the London Metal Exchange, the three-month billet contract traded at $545 a ton, from $557 a ton at the close last Thursday.