Dow Jones reported that a German steel industry association has raised its forecast for 2011 German crude steel production due to continued demand from key customer industries.

Wirtschaftsvereinigung Stahl also criticized the European Union's emission reduction targets for the steel industry, saying that benchmarks are physically and technically unachievable.

Mr Hans Juergen Kerkhoff, the industry group's president, said that the EU benchmarks for blast furnaces are 10% below the emission levels of the plants with the lowest carbon dioxide emissions. He added that "We therefore call on the German government to object to the EU proposal for the carbon dioxide benchmarks."

Mr Kerkhoff said the proposal would require the steel industry to purchase considerable amounts of CO2 allowances on the market, which would result in additional costs of EUR 300 million a year for German steelmakers alone.

The industry group's criticism of echoed comments made by European steel and iron industry group EUROFER, which earlier said it started legal action against the European Commission to challenge the rules on carbon dioxide emissions imposed on the steel industry.

EUROFER said the proposed carbon benchmarks would burden the EU's steel industry with additional costs of around EUR 5 billion between 2013 and 2020. For 2011 the industry group expects crude steel output in Germany to increase 4% on the year to 45.5 million tonnes. It previously forecast a 2% increase to 44.5 million tonnes.

German steel plants continue to operate at high utilization rates driven by robust demand from export oriented engineering industries such as the automotive and machinery sectors.

Mr Kerkhoff said that average capacity utilization of German steel mills has been more than 90% so far in 2011, around 10 percentage points above the global average.