Iron-and-Steel Industry: The Perfect Storm
In 2023, steel production in Germany, Europe's largest producer, reached its lowest level since 2009
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Status Quo
The results of 2021 gave European metallurgists hope: after several years of decline, the industry was finally beginning to recover. But 2022-2023 delivered an even deeper crisis. Cautious forecasts are being made for 2024-2025, but they are also being revised towards a slower recovery.
Sharply increased prices for electricity were combined with a drop in demand for products.
The measures taken by the European authorities have indirectly contributed to the worsening of the crisis. Tightening monetary policy helped slow inflation, but led to the decline of the construction industry, which accounts for 35% of European consumption of metallurgical products.
Some manufacturers are reducing capacity, based on the fact that the previous demand will not be restored. One explanation: during the transition to a post-industrial society, the demand for steel decreases.
High energy prices and pressures to decarbonize production have made it difficult for European steelmakers to compete on a cost basis with Asian and Middle Eastern producers.
Some manufacturers are reducing capacity, based on the fact that the previous demand will not be restored. One explanation: during the transition to a post-industrial society, the demand for steel decreases.
High energy prices and pressures to decarbonize production have made it difficult for European steelmakers to compete on a cost basis with Asian and Middle Eastern producers.
Steel production: only the USA wins
In 2022, steel production in Europe amounted to 136.3 million metric tons, compared to 152.6 million tons in post-Covid 2021. In 2023, steel production fell even further, to 126.3 million tons.
In 2023, steel production in Germany, Europe's largest producer, reached its lowest level since 2009, amounting to only about 35.4 million tons. Europe is the region currently facing the most significant challenges, according to Worldsteel's steel demand forecast for 2024 and 2025.
Demand in Europe totalled 136.8 million tonnes in 2023 (one of the lowest levels seen since 2000) and is set to reach 140.7 million tons this year, with modest growth of 2.9%. In 2025, demand is forecast to grow by 5.3% year-on-year to 148.1 million tons.
What is bad for Europeans looks positive for the United States. “The weak recovery of the EU and especially Germany is in opposition to the USA, where steel consumption is expected to rise by 20% between 2020 and 2025,” says Martin Theuringer of WV Stahl.
In 2023, steel production in Germany, Europe's largest producer, reached its lowest level since 2009, amounting to only about 35.4 million tons. Europe is the region currently facing the most significant challenges, according to Worldsteel's steel demand forecast for 2024 and 2025.
Demand in Europe totalled 136.8 million tonnes in 2023 (one of the lowest levels seen since 2000) and is set to reach 140.7 million tons this year, with modest growth of 2.9%. In 2025, demand is forecast to grow by 5.3% year-on-year to 148.1 million tons.
What is bad for Europeans looks positive for the United States. “The weak recovery of the EU and especially Germany is in opposition to the USA, where steel consumption is expected to rise by 20% between 2020 and 2025,” says Martin Theuringer of WV Stahl.
Situation at individual enterprises
Leading German industrial group ThyssenKrupp has said it would cut steel production by 1.5-2 million metric tons per year to better adapt to changes in the European market.
On February 1, 2022, ThyssenKrupp shares were worth €9,600. By September 1, 2022, they were worth half that value: 4,386 euros. By July 2023, the price had rebounded to €7,230, but this reversal of fortunes did not last long. As of April 1, 2024, the share price was 4,728 euros.
The Slovak steel mill US Steel Kosice decided in April 2024 to extend the downtime of blast furnace No. 2, which was shut down in March for minor repairs.
The Serbian metallurgical plant HBIS Serbia, which stopped blast furnace No. 1 in mid-2023, has no plans so far to return it to operation.
International players have a different approach. The ArcelorMittal corporation, which halted work at a number of enterprises in Europe at the end of 2023, is making them operational again. In early January, after two weeks of downtime, work at the Sosnowiec plant in Poland resumed. Of course, we are talking about incomplete capacity utilization.
British metallurgical company Liberty Steel announced the return to operation of rolling mills and a galvanizing line at the Dunaferr plant in Hungary. However, Liberty did not provide a timeline for launching the idle blast furnace at Dunaferr.
On February 1, 2022, ThyssenKrupp shares were worth €9,600. By September 1, 2022, they were worth half that value: 4,386 euros. By July 2023, the price had rebounded to €7,230, but this reversal of fortunes did not last long. As of April 1, 2024, the share price was 4,728 euros.
The Slovak steel mill US Steel Kosice decided in April 2024 to extend the downtime of blast furnace No. 2, which was shut down in March for minor repairs.
The Serbian metallurgical plant HBIS Serbia, which stopped blast furnace No. 1 in mid-2023, has no plans so far to return it to operation.
International players have a different approach. The ArcelorMittal corporation, which halted work at a number of enterprises in Europe at the end of 2023, is making them operational again. In early January, after two weeks of downtime, work at the Sosnowiec plant in Poland resumed. Of course, we are talking about incomplete capacity utilization.
British metallurgical company Liberty Steel announced the return to operation of rolling mills and a galvanizing line at the Dunaferr plant in Hungary. However, Liberty did not provide a timeline for launching the idle blast furnace at Dunaferr.
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