Reuters reported that Kloeckner & Co, a leading independent steel distributor, expects to post a net profit this year on the back of sales growth forecast at more than 20%.

Mr Gisbert Ruehl CEO of Kloeckner & Co said that he expected higher steel prices in the second quarter this year but could not predict its development in the second half due to downside risks to the sector's recovery.

Kloeckner & Co had said that it was aiming for annual sales growth of more than 10% from 2010 and reiterated its EBITDA margin target of more than 6% from 2011. In the first nine months of 2009, the company posted a net loss of EUR 197 million. Kloeckner is scheduled to disclose fourth quarter results on March 9th 2010.

Mr Ruehl said that "We think prices of hot rolled coil will be north of EUR 500 per tonne in the second quarter. Right now it is about EUR 440 to EUR 460. I expect iron ore price will be up by 70% from the current contract prices. That is more than expected. For coking coal, it will be 40%."

Mr Ruehl also said Kloeckner's sales were expected to grow by over 20% this year, partly because of acquisitions. He added that "We expect moderate restocking this year. Steel prices are improving globally. Higher raw material prices will increase the floor for 2010. Still comparatively low inventories throughout the supply chain leave room for technical demand increase."

(Sourced from www.reuters.com)