ThyssenKrupp optimistic for steel outlook in 2009

By Christiaan Hetzner

FRANKFURT (Reuters) - The top executive at ThyssenKrupp's (TKAG.DE) core steelmaking division expressed confidence that emerging markets would keep the steel boom alive next year even as economic growth slows.

"We are confident. The optimism is based on the continued favourable outlook for the global steel markets," ThyssenKrupp Steel Chief Executive Karl-Ulrich Koehler said in a speech on Saturday in Washington, DC.

"In particular, demand from Asia, Latin America, the Near East and the Commonwealth of Independent States will increase at an above-average rate in the coming years and considerably influence the world market," he continued.

His bullish comments were the first to emerge in the run up to the annual congress of the IISI global steel federation, a key event which starts next week in the U.S. capital.

This could soothe investors who have sold off European steel stocks recently, afraid that steel demand will slump with economies slowing as a result of the crisis on Wall Street.

"Steel equities are pricing in a total collapse in the steel price ... the August-September performance has so far been the worst in 35 years," wrote analysts at Credit Suisse in a recent report.

Industry leader ArcelorMittal (ISPA.AS)(MT.N) fed these fears after it said in mid-September that it was prepared to cut production by up to 15 percent to maintain steel prices.

Koehler, whose steel division supplies high quality flat steel products like hot rolled coils (HRC) to customers in the automotive and white goods industries, said his business in the fiscal year ended in September 2008 would not match the record pretax profit seen prior-year.