Billet prices in the Black Sea region softened slightly this week, pausing from recent gains as a religious holiday closed business in key consumer Turkey, but traders said buying could return next week.
Traders quoted Black Sea free-on-board (fob) billet at around $550-565 a tonne, versus $540-580 a tonne last week.
Traders expected a spurt of buying in Turkey next week, when businesses re-open after this week''s Kurban holiday there.
"All the signs are that everything''s strengthening," one trader said.
Strength in scrap prices remained a support, traders said. Scrap prices in Turkey, one of the world''s top consumers of the steel-making feed, were at $390-400 tonne last week.
"The market''s firming up," another trader said. "The market in the winter time normally increases on scrap prices," he added, citing the lack of availability of scrap.
Spot steel prices in China''s domestic market fell this week on growing concerns of tightening liquidity from a possible interest rate increase.
But looking ahead, steel prices were broadly expected to rise in 2011. Underlining this, consultants CRU Group said on Thursday global demand and prices for stainless steel should rise next year, bolstered by growth in Asia, recovery in mature economies and less destocking by distributors.
"The expectation is that prices are going to edge up because there is quite a lot of demand that needs to be satisfied, and there''s actually not a lot of tonnage around," another trader said.Voestalpine, the Austrian maker of high-quality steel, said on Thursday the steel industry should see a good 2011, forecasting a strong rise in its 2010/11 earnings.
But World No. 1 steelmaker ArcelorMittal was caught in a margin squeeze, unable to increase prices to cover higher raw material costs, the head of its flat steel business in the Americas said on Thursday.
GLOBAL OUTPUT
Global crude steel production rose 17.5 percent year-on-year in the January to October period to 1.165 billion tonnes, figures from the World Steel Association showed on Friday. China''s vast steel sector produced 2 percent more crude steel output in the first 10 days of November than in late October, data from the China Iron & Steel Association (CISA) showed on Thursday. But market players are also keeping an eye on output cutbacks in China. All steel-rolling mills in the Fengrun district of Tangshan, in the northern Chinese province of Hebei, have been ordered to shut down for five days to help meet energy-saving targets, three mill sources said on Friday.
Steel mills Wuhan Steel and Angang announced cuts to steel prices for December bookings, in response to falling prices after Baosteel kept prices unchanged for the month from November. In Japan crude steel output rose 3 percent in October from the previous month, but output could fall in the months ahead, an industry body said on Friday.
In Australia, Fortescue Metals Group, the country''s third biggest iron ore miner, said it will invest $8.4 billion to nearly triple its output capacity to 155 million tonnes a year, seeking to seal its spot among the world''s top producers.