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Steel tube prices to rebound by Q3 - Mr Marcegaglia

Prices of steel tubes and their raw material, hot rolled coils, are likely to rebound in the third quarter of 2011 after a fall in the second quarter as demand picks up.

Mr Antonio Marcegaglia chief executive of Italian steel processor Marcegaglia said that "I expect prices to have bottomed and slightly rebound starting in the third quarter I think prices should go up by EUR 20 per tonne to EUR 30 per tonne for hot rolled coils. This is because fundamentals are coming back, Japan is coming back and China is developing its housing plan.”

Mr Marcegaglia told Reuters that prices of tubes and other final steel products would hopefully outpace an expected increase in raw material prices.

He, citing forecasts from EUROFER, said that overall Steel demand in Europe is expected to rise 5.2% this year after a 4.0 to 4.5% increase in 2010.

He said that apparent steel demand, which includes inventory build-up, is expected to rise 6.0% after a nearly 19% jump in 2010 powered by stock rebuilding after a slump in 2009 when the industry was hit hard by the global economic crisis.

Mr Marcegaglia said that "I think it could be even a bit better added referring to 2011 steel demand compared to EUROFER forecasts. This year, real consumption and apparent should be more aligned.”

He said that steel demand in Italy is expected to rise about 9 percent this year as major players, including Marcegaglia, plan to boost output and consume more steel.

Marcegaglia group wants to raise its output of welded tubes to 2.4 million tonnes by the end of 2012 from 1.5 million tonnes in 2010 thanks to increasing production in Italy, China and Brazil, he said.

Overall steel demand in Italy and the rest of Europe has been driven mainly by mechanical engineering, machinery and equipment as well as automotive industries. Construction remained weak, especially in southern Europe, Marcegaglia said.