German industry on Friday faced up to the prospect of difficult pay negotiations when the powerful IG Metall union demanded a 6 per cent pay rise for the country's 85,000 steel workers, as a pay-off for economic recovery.

"It's time all employees profit from the upswing," said Oliver Burkhard, the head of IG Metall in North Rhine-Westphalia, the country's main steel-producing region, pointing out steel workers' restraint during the global crisis.