STOCKS NEWS EUROPE-Vallourec soars along with commodities

STOCKS NEWS Reuters Results diary

Stocks on the move [HOT-RTRS] Real-time Equity News [E] [WEU/EQUITY]

11:29GMT 06Jan2009-Vallourec soars along with commodities

---------------------------------------------------------

Shares in French steel tube maker Vallourec (VLLP.PA) soar 11 percent, topping the CAC 40 .FCHI leaderboard, as the stock benefits from a strong rebound in commodity prices.

"There seems to be more and more people thinking that massive international infrastructure projects could create a decent squeeze on metals and commodities prices in the early parts of 2009," a Paris-based trader says.

"One of the reasons for Vallourec's weakness over the past months has been the perception that lower steel prices would possibly allow Chinese to produce cheaper tubes and thus put downward pressure on prices and margins in the sector, even on the higher-end tubes that Vallourec produces. One of the main reasons why this did not materialize was that financing for these sorts of projects in China was cut off," the trader says.

Vallourec's stock tumbled 56 percent in 2008, while the CAC 40 lost 43 percent.

Reuters Messaging rm://blaise.robinson.reuters.com@reuters.net