By Christiaan Hetzner

FRANKFURT (Reuters) - German industrial conglomerate ThyssenKrupp (TKAG.DE: Quote, Profile, Research) said it had been hit by rising raw material costs and problems at a major mill in Brazil, weakening its shares on Wednesday despite in-line second-quarter results.

Earnings before tax jumped 30 percent to 742 million euros ($1.15 billion) in the three months to end-March versus the average estimate of 749 million euros from a Reuters poll of 13 analysts, helped by a weak quarter last year that was burdened by a record EU cartel fine in its elevator business.

Germany's largest steelmaker left its outlook unchanged.

After initial volatility, ThyssenKrupp shares traded down 0.1 percent by 1012 GMT, in line with Germany's blue-chip DAX index .GDAXI.

"We see rising risks in the earnings of the steel and stainless segment as well as in the rising capex figure for the investments in Brazil," UniCredit analyst Christian Obst said.

ThyssenKrupp is betting big on an industry supercycle fuelled by increasing demand from emerging markets like China. It plans to invest roughly half of its earmarked 18 billion euro capital expenditure programme into its carbon flat steel division with another 2 billion in its stainless business.

Unlike Lakshmi Mittal, the billionaire CEO of steel titan ArcelorMittal (MT.N: Quote, Profile, Research), ThyssenKrupp CEO Ekkehard Schulz eschews acquisitions, instead preferring to build a slab mill in Brazil and a carbon and stainless steel finishing plant in Alabama with planned outputs of about 5 million tonnes per year.

Raw materials are a problem, though, with ThyssenKrupp shouldering a 65 percent hike in iron ore prices and a 300 percent jump in coking coal costs that the industry negotiated with the global mining groups and took effect in April.