Reuters reported that Black Sea billet prices firmed this week, supported by rising prices in Asia and expectations of a revival in demand from the construction sector in North Africa and the Middle East after the end of Ramadan.
Traders quoted Black Sea billet at USD 680 per tonne to USD 690 a tonne FOB Russia and Ukraine compared with offers at USD 670 to USD 680 per tonne last week. Turkish billet was also on offer at USD 680 to USD 690 FOB little changed from last week.
Trading volumes were low as the summer holidays, coupled with the beginning of Ramadan slowed down activity in construction where most long steel products are consumed. Prices firmed up on expectations that most consumers have not bought enough material to replenish their stocks and after the holiday they will have to go back to the market.
A London based billet trader said "The sentiment is bullish for September. It will probably be only for a short window but people expect prices to go further up because of more projects in China and better demand from the Middle East post Ramadan."
Shanghai rebar futures rose to three month highs on Monday supported by a construction boom in China and where a drive to build 10 million cheaper houses this year is boosting demand for steel.
Responding to better demand and many steel makers have increased their capacity utilization in the last few months.
Local specialist news agency UGMK said this week that Ukraine steel production rose 7.5% to 20.2 million tonnes in the first seven months of 2011 versus the same period in 2010. Steel output at Ukraine plants owned by Metinvest Holding rose by 8%YoY in January to July 2011 to 8.5 million tonnes.
Many traders had long positions on steel billet on expectations that prices for long products will move up soon.
A source at a Turkish steel mill, underlining that its factory was working at close to full capacity said "We had a lot of enquiries from the Middle East and North Africa and they are placing orders now for September shipment."
The source said "So far it has been a great summer. We were expecting a slowdown and a very quiet Ramadan but it hasn't happened."
( Source: www.steelguru.com )