Kloeckner & Co warns on 2012 profit on weak Europe

FRANKFURT (Reuters) - Kloeckner & Co , Europe's biggest independent steel trader, said it would only reach its 2012 profit target if Europe's economy improved in the second half of the year.

"In Europe, as we expected, the environment remains difficult. With substantial overcapacity dominating the market, competition is very fierce," Chief Executive Gisbert Ruehl said in a statement on Wednesday.

"On top of this, customers continue to be unsettled by the ongoing sovereign debt crisis," he said.

The metals trader said its earnings before interest, tax, depreciation and amortisation (EBITDA) will stagnate at last year's figure of 217 million euros ($282 million) if Europe's economy fails to recover.

It previously saw an increasing in operating profit, and analysts on average have forecast a figure of 274 million euros for the year.

Kloeckner's gloomy outlook echoes comments by ArcelorMittal , which said on Tuesday it sees steel consumption to drop by 2 percent in Europe this year, while a surge in North American demand would lead to global steel consumption growing by between 4 and 4.5 percent.

(Reporting by Maria Sheahan)

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