Salzgitter CEO warns against premature optimism
FRANKFURT, Oct 27 (Reuters) - Salzgitter (SZGG.DE) Chief Executive Wolfgang Leese on Tuesday cautioned against premature optimism in the steel sector, warning that markets were fragile and that a recovery in demand is unlikely to be sustained.
If things go well, demand will continue to be flat, Leese said on the sidelines of an event in Garbsen, near Hanover, Germany.
Signs of recovery over the past weeks are unlikely to be sustained, he cautioned.
The slump in demand - particularly from important industries such as automotive and engineering -- has hit Salzgitter and other steel makers.
Salzgitter's factories are running at between 80 percent and 85 percent of full capacity, he said. How much longer this will be the case, "remains to be seen," he added.
The impact of slumping demand will become clear when third quarter earnings are published, he said. Salzgitter is set to publish earnings on November 12.
Salzgitter is expecting to report a loss for the full year. The target of reaching breakeven in 2009 was abandoned long ago, Leese said.
European Steel Industry body Eurofer last week said a measurable recovery was likely in 2011. (Reporting by Arno Schuetze in Hanover; editing by Carol Bishopric)
