By Rebekah Curtis LONDON, Nov 12 (Reuters) - Billet prices in the Black Sea region held firm this week, supported by year-end restocking and with producers passing on costs as scrap rose, traders said. Traders quoted Black Sea free-on-board (fob) billet at around $540-580 a tonne, from $550-560 a tonne last week. "It's just a quick restock before New Year," a trader said. "There's sentiment the price will go higher." Gains in billet were driven largely by producers raising prices, he added, voicing concern that mills could over-do the price hike and deter demand. Scrap prices in Turkey, one of the world's top consumers of the steel-making feed, were at $390-400 tonne, unchanged from levels quoted week before and after gaining in recent weeks. "It seems to be producers putting prices up to cover their input costs," another trader said of billet's firmness. Demand remained broadly subdued, traders said, noting demand in Africa, Asia and the Middle East. But consumption looked set to pick up at the start of 2011, they added. Underscoring this, ArcelorMittal, the world's largest steelmaker, expects the global steel market to grow five to six percent next year, driven largely by solid demand from Asia and emerging regions. BACK ONLINE Meanwhile, removing some support from prices, production revved up again in China. Production there had been cut at various mills in September during a campaign to curb electricity supplies to big industrial consumers. The country produced some 50 million tonnes of crude steel last month, a rise versus September, according to data issued by the National Bureau of Statistics on Thursday. Steel prices in China rose 5.7 percent this week to hit their highest point in 16 months, with traders acting fast to build up their inventories before a possible supply squeeze over the winter. In company news, China's leading steel maker Baosteel said it would keep the prices of December bookings for its main hot-rolled and cold-rolled products unchanged. Meantime, Beijing-based General Steel Holdings Inc posted a surprise third-quarter loss, hurt by lower sales and higher prices of iron ore and coking coal. Producers worldwide looked set to face tough times until the end of 2010.
The world's largest steelmaker ArcelorMittal and two major American producers warned recently that the steel industry faces a fallow period at least through to the end of the year. Elsewhere, South Africa's Merafe Resources said on Tuesday its medium- to long-term growth forecast for stainless steel output remained strong. South Africa's largest producer of ferrochrome said it expected production to reach record levels this year. Turkey's religious Kurban holiday will close business there next week, for a half day on Monday and for full-days over the rest of the week. "We're getting prepared to relax for one week, " a trader in Turkey said. (Editing by Alison Birrane) Keywords: STEEL PHYSICAL MARKET (email@example.com; +44 20 7542 4365; Reuters Messaging: firstname.lastname@example.org) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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