Billet prices in the Black Sea region strengthened this week, helped by firming scrap prices and spots of robust buying in the Middle East, but demand stayed broadly muted in a slow global economic recovery, traders said. Traders quoted Black Sea free-on-board (fob) billet at around $530-$550 a tonne, from $530-$535 a tonne last week. Scrap prices in Turkey, one of the world''''''''s top consumers of the steel-making feed, were at $375-$380 a tonne, edging up from traders'''''''' quotes of $355-$375 a tonne the week before.
Market optimism was limited, with traders saying the price rise was partly being pushed by producers, not just pulled by demand. ''''''''It''''''''s going to be a difficult fourth quarter for sure,'''''''' said one trader. Echoing this, the world''''''''s largest steelmaker ArcelorMittal said on Tuesday shipments would pick up only slightly in the final quarter, average steel prices fall versus the third quarter and iron ore and coal costs would rise. And major American producers U.S. Steel and AK Steel posted third-quarter losses and predicted further weakness in the fourth quarter.
But the trader added that the market was more positive about the first quarter about 2011. ''''''''There''''''''s some light at the end of the tunnel,'''''''' he said, adding that the best pockets of demand were currently in Iran, East Africa and West Africa. Bolstering traders'''''''' hopes 2011 could start well, Germany''''''''s biggest steelmaker ThyssenKrupp expects demand for steel to remain robust in 2011, the head of the company''''''''s Steel Europe division told Reuters on Wednesday. Also supporting steel were output cuts in key producer China, as the country aims for year-end energy efficiency targets by limiting electricity supply to power-intensive steel mills.
For China''''''''s latest steel output data see: It''''''''s a shortfall in supply versus demand...,'''''''' another trader said of billet''''''''s rise, ''''''''...and the fact that scrap seems to be edging slightly upwards.'''''''' Meanwhile, steel prices on China''''''''s market remained unchanged for the second consecutive week. And the country has kicked off the talks for next year''''''''s iron ore pricing, after the world''''''''s top iron ore consumer officially adopted a quarterly scheme this year, the China Iron&Steel Association said on Friday.