* CEO sees steel demand in Europe declining in H2 from H1
* CEO sees European steel prices lower in Q3 versus Q2
* CEO urges European steelmakers to cut output
* Share prices up 0.7 percent
(Adds background, CEO quotes, NLMK)
By Marilyn Gerlach and Tom Kaeckenhoff
FRANKFURT, July 2 European steelmakers should
cut output to stabilise prices during a likely slowdown in
demand in the second half, Europe's biggest independent steel
trader, Kloeckner & Co (KCOGn.DE), said.
"If the producers take out capacity from the market, then
the prices could go up from the end of the third quarter,"
Gisbert Ruehl told Reuters Insider in an interview on Friday.
"In terms of demand in Europe in H2, all in all, it will be
likely weaker compared with the first half," he said.
Reuters Insider show on link.reuters.com/has35m
Ruehl said he expected hot rolled coil (HRC), a benchmark
steel product used mainly in carmaking, could fall to around 550
euros ($673) per tonne in the third quarter.
HRC averaged around 530 euros in the second quarter and
peaked at around 600 euros in late June.
Separately on Friday, Novolipetsk Steel (NLMK.MM), Russia's
fourth largest steelmaker, said third-quarter prices would
likely fall due to the weak recovery in developed markets.
In June, the world's top steelmaker ArcelorMittal (ISPA.AS)
said was considering idling three blast furnaces in Europe to
meet lower demand. [ID:nLDE65214X]
The demand slowdown was also marked in top steel producer
China where prices have fallen more than 10 percent since a peak
in mid-April. Some Chinese mills are scaling back output as the
government tries to cool the economy. [ID:nTOE66003X]
Also, South Korea's largest steelmaker POSCO (005490.KS)
said on June 22 it was to raise benchmark steel product prices
by 6 percent, less than expected. [ID:nTOE65L006]
Ruehl said that based on Europe's January-May output,
full-year production would be around 180 million tonnes. "But
the expected demand this year is around 150 million only, so
capacities need to be reduced," he said.
Turning to acquisitions, Ruehl said he would not rule out
another acquisition this year of a company with annual sales of
around 50 million euros in Europe or the United States, and he
was also eyeing Brazil and China.
Earlier this year, Kloeckner made two acquisitions,
including steel service group Becker in a deal worth 207
million euros. [ID:nFAB015652]
Since listing four years ago, the company has acquired 20
firms, but the acquisition spree was put on hold in late 2008 as
the downturn bit.
"We cannot rule out making an acquisition in the emerging
market. On Brazil and China, we are working out an entry
strategy there. In China, it will likely be a greenfield
strategy while in Brazil, it can only be through an
acquisition," Ruehl said
He reiterated a forecast for an EBITDA margin of at least 3
percent this year and more than 6 percent next year.
Kloeckner shares were up 0.7 percent at 1229 GMT, in line
with the midcap index .MDAX.
(Additional reporting by Josie Cox; Editing by Dan Lalor)
($1 = 0.8172 euro)