Reuters reported that Swedish steelmaker SSAB beat second quarter earnings forecasts, helped by demand for its specialist products in the United States and Europe, and said the recovery had further to run.

SSAB said that it expected a dip in the third quarter due to maintenance stoppages, higher raw materials costs and uncertainty about the European economy, but the underlying trend remains strong.

Mr Martin Lindqvist CEO of SSAB said in a statement that "However, the recovery is continuing and demand is expected to be stronger than in 2010."

That reassured investors, sending shares up almost 10% after they hit a near two year low earlier in the week.

Mr Claes Rasmusson analyst at Swedbank said that "A very strong result and a good development in both EMEA and North America."

Mr Rasmusson said that the outlook is fairly okay after all, since they are delivering so well now. He added that "The market is very aware the third quarter will be weaker."

SSAB's expectation that the third quarter will be weaker than the second echoed comments from peers Nucor Corporation and POSCO, who both warned of slowing demand and increased price pressure ahead. The Swedish steelmaker said demand had slowed towards the end of the second quarter.

SSAB's niche products, making up 37% of shipments, saw strong demand in the second quarter from truck and bus makers as well as energy companies in North America.

Maintenance work in Sweden will knock SEK 100 million to SEK 150 million off operating profit during the third quarter. A longer outage in Montpelier, Iowa in the third and fourth quarters will hit operating profit by SEK 350 million to SEK 400 million, of which roughly 25% will be in the third quarter.

Operating profit at SSAB, which bought North American steel maker IPSCO in 2007, almost doubled to SEK 1.3 billion from SEK 708 million the same period last year, against an expected profit of SEK 1.1 billion in a Reuter's poll.

(Sourced from www.reuters.com)