German steel association Wirtschaftsvereinigung Stahl projects a strong start for the steel industry in 2012 due to solid demand and low inventory levels.

The association said companies are likely to restock inventories, which fell to low levels towards the end of 2011 amid economic uncertainty, supporting demand in Germany.

Order intake for steel products in the fourth quarter stood at 9.22 million metric tons, down 5.5% from a year earlier, but 5% higher than in the third quarter of 2011, the association said Friday. Fourth-quarter order backlog stood at 8.61 million tons, a rise of 7% from end-2010, and an increase of 11% compared to the third quarter.

Earlier this week, the association said January output fell 8.5% from the year-earlier month, but that momentum is likely to accelerate in light of improving orders.

-By Tapan Sharma, Dow Jones Newswires; +49 69 29725 508; tapan.sharma@dowjones.com