February 9, 2010 / 1:02 PM / 10 years ago

RPT-UPDATE 1-Salzgitter increases capacity utilization

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HANOVER, Germany, Feb 9 (Reuters) - Germany’s second biggest steelmaker Salzgitter (SZGG.DE) has increased production levels as it benefits from higher demand.

“Capacity utilisation in the flat rolled steel business has picked up significantly to now 80 to 85 percent,” a Salzgitter spokesman told Reuters on Tuesday.

With macroeconomic data showing signs of improvement and inventories depleted, traders and wholesalers are coming back to the market to restock, encouraging mills to bring back some idle capacity.

In the beams business capacity utilisation still stands at just 70 percent, as cold weather stifled the construction industry, the Salzgitter spokesman said.

Like other steel companies, Salzgitter plans to pass on price hikes in raw materials to customers of flat rolled steel and heavy plates, the company spokesman said.

Due to a severe slump in demand, capacity utilization at Salzgitter had slipped to below 50 percent in mid-2009 and the steelmaker put 9,000 of its 24,000 employees on short working hours.

In February, 2,300 employees were still on the programme, the company said.

Salzgitter’s recovery mirrors that of rivals like German market leader ThyssenKrupp (TKAG.DE), which reported a stabilisation of production volumes in mid January. [ID:nLDE60B1US] (Reporting by Arno Schuetze)

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