Black Sea billet prices rose this week and were likely to increase further as demand goes back to normal but concerns remained over politial tensions in the Middle-East, traders and producers said.
Traders quoted Black Sea billet free-on-board (fob) at $610-630 a tonne, compared with sales at $600-610 a tonne fob last week.
Due to political unrest some Egyptian ports closed and a few steel and steel scrap cargoes directed to the country were diverted to other destinations and sold at lower prices in the last two weeks, traders said.But the political situation seemed more stable this week. Egyptian mills asked their suppliers to provide them with steel scrap and steel semi product as their operations are back to normal, Turkish producers said.
"The reason for higher demand is that some customers who had to buy material in the last 2- 3 weeks waited until now as they thought prices would go down due to the problems in Egypt," a source at a steelmaker said.
Egypt and other middle-eastern and African countries import large volumes of Black Sea steel long products, which are used in contruction.
"There are more enquiries now. If nothing else happens prices will increase next week," a second steelmaker said.
"But after Egypt I am still a bit scared of these riots in Iraq, Barhain, Yemen and Lybia."
Some, however, feared that new protests in the Middle-East may continue to cripple demand.
"Yes, the sentiment is more positive and people think prices are to increase but I find it hard to believe. There is so much uncertainty in the Middle East," a UK-based billed trader said.
Billet from the CIS sold at about $610 per tonne this week, up from sales at $600-610 per tonne last week while Turkish producers achieved sale prices of $630 per tonne compared with offers at $630-640 last week.
"CIS producers have sold good volumes of billet now so they may sit out of the market for a bit and wait for higher prices," a second trader said.
Sale prices for Turkish rebar rose by $10 this week to $650-660 per tonne.Demand for wire rod was much better than for rebar though, Turkish producers said. I think wire rod is selling better because it is a semi-product and steel processor are buying more on expectation of higher demand from the contruction sector," the source at the second steel mill said.Demand for long steel products generally peaks in the second quarter of the year as the weather conditions in the northern hemisphere are more favorable for construction.On the London Metal Exchange, the three-month billet contract traded at $575 a tonne, from $553 a tonne at the close last Friday.