* German steel group sees no major leaps in steel sector
* Market uncertainty remains -trade group president
* ArcelorMittal sees European long-steel consumption flat
* ThyssenKrupp halts shortened working hours
(Adds ThyssenKrupp drops shortened working hours, PwC estimates
for steel demand)
By Maria Sheahan and Tom Käckenhoff
DUESSELDORF, Germany, Feb 13 Germany's steel
sector should not get its hopes up following some positive data
at the start of the year, with demand remaining weak and
competition in global markets intensifying, a trade group said
"I don't expect any major leaps," Hans Juergen Kerkhoff,
president of the German steel association, told Reuters, adding
he did not see any sustainable recovery across Europe either.
Austerity measures aimed at cutting budget deficits have hit
economic growth across the European Union and are particularly
painful for the steel industry because of the accompanying
slowdown in demand for cars, appliances and new buildings.
Germany's steel sector, which accounts for about a quarter
of Europe's crude steel production, has performed better than
its counterparts in France, Italy or Spain, but is still
expected to post only moderate growth this year.
"There is still uncertainty in the markets, just like there
was in the second half of 2012, when both traders and processors
were cautious," Kerkhoff said on the sidelines of a steel
Customers have now started refilling depleted inventories,
driving up output by 5 percent in January, the biggest monthly
gain since September 2011. However, a 4 percent decline in new
orders raised doubts that restocking would continue.
ThyssenKrupp, Germany's biggest steelmaker, this
week warned that it was unlikely to return to growth until its
next financial year, though a spokesman said on Wednesday its
workers were no longer on shortened hours this month.
ThyssenKrupp had curbed the working hours of about 2,000 of
its employees from last August, under a government-subsidised
programme set up in the 2008-2009 recession to help companies
bridge the downturn without widespread job cuts. It could return
to shortened hours next month at short notice.
Europe's steel sector overall has a tough year ahead, with
EU steel demand, including inventory adjustments, seen down 0.7
percent this year before a 3 percent rise in 2014, European
steel producers' lobby group Eurofer said.
"We were hoping to see a slow recovery year on year, but it
is just not there," Arnaud Poupart-Lafarge, chief executive of
ArcelorMittal's Long Carbon Europe business, told Reuters.
ArcelorMittal, the world's largest steelmaker,
last week reported a $3.7 billion group loss for 2012 after
writing down the value of its European steel business by several
Consultancy PwC estimates that European steel demand will
grow at an annual rate of only 0.6 percent through 2025, well
below a global average of 4.5 percent, according to a study
published on Wednesday.
Poupart-Lafarge said that he expects consumption of
long-steel products, such as bars used in high-rise buildings,
bridges or railway tracks, to remain flat in Europe this year.
The EU is now working on a proposal to reinvigorate Europe's
steel sector, which employs 360,000 people, with measures
covering trade, raw materials and energy policy.
"We need more demand from the automotive, construction and
mechanical engineering sectors ... Only if we see growth coming
back will we produce more steel," Poupart-Lafarge said.
ArcelorMittal has already reduced production at its
long-steel plants and idled several plants as demand went down
30 percent compared with pre-crisis levels.
(Editing by Dan Lalor, David Goodman and Phil Berlowitz)