DUESSELDORF, Germany Feb 13 Germany's steel
sector is unlikely to see a sustainable recovery this year as
demand remains weak and competition in global markets
intensifies, a trade group said.
"The economic and structural conditions are difficult,"
German steel association president Juergen Kerkhoff told
journalists ahead of a steel conference on Wednesday.
Europe Union-wide austerity measures aimed at cutting
budget deficits have hit economic growth and proved particularly
painful for the steel industry because of the accompanying
slowdown in demand for cars, appliances and new buildings.
Germany, Europe's biggest economy, was one of the strongest
performers in the euro zone crisis but still saw its economy
shrink 0.5 percent in the final three months of 2012.
While the downturn is expected to be short-lived, there have
been few signs of recovery in the steel sector, a bellwether of
the broader economy.
ThyssenKrupp, Germany's biggest steelmaker,
reported a 38 percent slump in core profit on Tuesday and said
it saw no growth until its next financial year, weighed down
especially by weak demand at its European steel business.
Bigger rival ArcelorMittal, the world's No.1
steelmaker, last week reported a $3.7 billion loss for 2012
after writing down the value of its European steel business by
several billion dollars.
The sector produced 4.7 percent less crude steel in the EU
in 2012 than a year earlier, the steepest decline of any region
in the world. Germany did marginally better, with a 3.6 percent
The German steel association still sees crude steel output
rising about 1 percent to 43 million tonnes this year, partly
thanks to customers having to refill inventories drawn down last
In January, output was up 5 percent, the biggest monthly
gain since September 2011, but new orders were down 4 percent.
"At the start of the year, inventories are at least partly
being refilled. It remains to be seen how long this 'technical'
reaction will last," Kerkhoff said.
(Reporting by Maria Sheahan; Editing by Dan Lalor)