(Reuters) - Black Sea region billet held steady this week after a significant increase in the past few weeks on firm demand from buyers in the Middle East and North Africa and limited supply.
Traders quoted Black Sea billet at $640-650 a tonne free-on-board (fob) Russia and Ukraine, a similar level to last week but up from $600-640 a tonne at the end of April.
Major steel billet importers such as Iran and Egypt came back to the market this month pushing up demand after 2-3 months of stagnation as political unrest in North Africa and the Middle East depressed investment in construction there. nTOPMEAST
Steel billet is a steel long semi-finished product mainly used for construction.
Traders are unsure whether current prices are sustainable longer term or whether a dip in demand could be seen soon.
"Demand is quite firm at the moment but this market is not very consistent," said a UK-based billet trader.
"Lately it has been active relatively speaking but demand is not as good as it used to be," the trader said, comparing the current situation with pre-crisis levels.
Prices for steel scrap -- a key ingredient for steelmaking -- rose this week as producers in Turkey, the top importer of steel scrap, were available to pay higher prices to secure steel scrap now that demand for steel long products has improved both in the domestic and the export market.
Cargoes of steel scrap sold at $450-470 a tonne cost-and-freight Turkey from $440-460 per tonne last week.
On the London Metal Exchange, the three-month billet contract FMD3=LX traded at $575 a tonne from $544 a tonne at the close last Tuesday.
The steel billet forward curve has moved from a $27 contango -- discount for cash over three-month billet -- on January 14, to a $18.50 backwardation -- premium for cash over three-month material -- recently, highlighting a pickup in demand for this steel product