Dusseldorf (Platts)--22Feb2011/554 am EST/1054 GMT
Germany's main steel industry group WV Stahl said Tuesday that a recovery in steel demand is gaining momentum across broader subsectors while it slammed the EU's latest carbon emission benchmark allowances as a threat to regional competiveness. Germany, the EU's biggest steel producer, is experiencing increasing steel demand at present, after higher output driven principally by automakers last year, WV Stahl president Hans Juergen Kerkhoff told delegates at the Handelsblatt Stahlmarkt 2011 conference in Dusseldorf. "The upturn in demand is getting broader and broader across the industry," Kerkhoff said. "In the financial crisis the steel industry was robust and it can go into 2011 with confidence." He cited particularly strong demand from energy pipeline applications buoyed by high oil and energy prices as Brent trades above $100/barrel on fears of supply disruptions in the Middle East amid heightened geopolitical risk. WV Stahl reiterated concerns about the burden on steelmakers of the EU emissions trading scheme, because it says the allocation targets provided penalize the industry as they are at levels below what is technically feasible. Other steel producers in Asia and the Americas so far can operate without such stringent emissions penalties. "The EC is far away from the economic realities for carbon curbs on industry," Kerkhoff said, based on the emissions trading resolution of December. The European Confederation of Iron and Steel Industries, known as Eurofer, said at the time the benchmarks used for the steel sector as defined by the EU were substantially below the climate change directive's provision to grant free allocations to the top 10% performers.--Hector Forster, hector_forster@platts.comSimilar stories appear in Steel Markets Daily. See more information at http://bit.ly/SteelMarketsDaily